LIBRARY OF CONGRESS 



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Class 
Book 



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OoppghtF. 






COPYRIGHT DEPOSIT: 



WORKS MANAGEMENT LIBRARY 



MAXIMUM 
PRODUCTION 

IN 

MACHINE-SHOP 
AND FOUNDRY 

By 

C. E. KNOEPPEL 




NEW YORK 

THE ENGINEERING MAGAZINE 

1911 



- 






Copyright, 1911 
By JOHN E. DUNLAP 






©CLA300320 






PREFACE 

The material on which the present book is based 
was most of it contained in three series of articles 
s published originally in The Engineering Magazine 
at various times from October, 1908, to May, 1911. 
It was all written in the very atmosphere of the 
k busy manufacturing plant and under the influence 
of daily contact with the problems and methods dis- 
cussed. Everything in it represents some phase or 
period of the author's personal experience. As here 
gathered in volume form, however, the material is all 
resurveyed, rearranged, largely recast, from the view- 
point of a larger experience and a maturer study of 
the mechanical industries and more advanced prin- 
ciples ^ and methods of management. The result is 
a logical, well-proportioned and well-balanced de- 
velopment of the subject from beginning to end, by 
which the relations of all its elements will be much 
more clearly understood. The discussion will be 
followed again with new and increased interest and 
reward, even by those who read the articles as they 
appeared in sequence in The Engineering Maga- 
zine. 

The machine-shop and foundry in Mr. KnoeppelV 
book are considered as twin factors in production, so 
closely related throughout a vast range of metal 
manufacturing that their problems can best be 
studied together. Therefore after laying down the 
principles of organization and management com- . 
mon to efficient operation and maximum success in 
both kinds of establishments, the author follows spe- 
cial applications of the same ideas first in the shop 



11 PREFACE 

and then in the -foundry. To this latter he gives the 
larger and closer attention, because it has heretofore 
been less thoroughly studied by systematic methods, 
and it yet offers immense possibilities of profitable 
improvement since it lies at the foundation of so 
many mechanical industries. 

Mr. Knoeppel has the intimate knowledge of shop 
and foundry conditions and workers that is gained 
only by being brought up "on the floor/' He has 
the grasp of principles and methods that character- 
izes the unusually successful manager. He has the 
wide viewpoint gained by association (as specialist 
in betterment work) with many well-known plants, 
having been formerly associated with Harrington 
Emerson and later a member of the organization of 
Suffern & Son. and to this wealth of equipment and 
experience he brings unusual power of analysis and 
clear interpretation, completed by close study and 
practice under one of the greatest of efficiency en- 
gineers. 

The Editor. 



CONTENTS 



PAGE 

Chapter I. The Two Great Forces in Manu- 
facturing 

Cost Accounting Should Present the Right 
Kind of Information in the Right Way — In- 
efficient Use of Cost Data — Cost Data Forceful 
in Two Ways — Analysis and Construction — Cost 
Data of What has been Done Used to Show 
What can be Done — Accountancy as a Spur to 
Efficiency — Organization for Efficient Super- 
vision—Outlines of an Effective Plan 1 

Chapter II. Importance of Efficient Organiza- 
tion 

The Purpose of Organized Supervision — Keep- 
ing an Efficient Control of Changing Business 
Conditions — Good and Bad Schemes of Organ- 
ization — Charts of Duties and Responsibilities 
— Lists of Duties and Their Assignment 17 

Chapter III. The Elements of Accounting and 
Management 

Production Elements Analyzed — The Division 
Common to all Manufacturing Plants — Classifi- 
cation of Production — Depreciation as an Ele- 
ment of Cost — Rules for Determining Deprecia- 
tion Rates — Forms for Depreciation Records... 31 

Chapter IV. Maintenance, New Construction and 
Reconstruction 

Commercial Production, Maintenance, Recon- 
struction, Special Work, and Expense — Defini- 
tions of Assets — Distribution of Charges — 
Twenty Practical Cases Discussed as Illustra- 
tions 54 

iii 



IV CONTENTS 

PAGE 

Chapter V. Systematic Processing, Assembly, and 
Erection 

Dangers of Ignorance of Actual Costs — In- 
fluences Affecting the Margin of Profit — The 
Factors of Production-Cost — Units of Produc- 
tion — Elements of Handling Work — Material, 
Cost, and Operation Cards — Principles and 
Rules of Storeskeeping — Forms for Tools and 
Jigs and Stock in Hand 76 

Chapter VI. Efficiency in the Use of Materials 
and Time 

Common Wastes and Their Amount — The 
Elimination of Wastes — Organizing the Shop 
Departments — Systematic Record of Orders — An 
Efficient Routine of Production — Requisitions 
for Material — Authority for Processing and As- 
sembly — Move Orders — How the Forms Are 
Used — Symbols for Work in Process — Time 
Records — Planning and Dispatching 95 

Chapter VII. Better Deliveries — More Satisfied 
Customers 

Commercial Gain from Efficient Production 
— Prompt Delivery Depends on Co-ordination 
between Chief Order Clerk, Works Manager, 
Chief Stores Clerk, Shipping Clerk — A System 
for Securing this Co-ordination — Routine, 
Forms, and Records Employed — The Effect on 
Efficiency of Production 128 

Chapter VIII. Scientific Management in the 
Foundry 

A Short Foundry Story Bringing Out the 
Ordinary Causes of Inefficiency, with a Time 
Analysis Summarizing the Results 143 

Chapter IX. Foundry Organization and Manage- 
ment 

Basic Principles — Fundamental Questions An- 
swered — The Necessary Expense — What Can Be 
Accomplished — Losses Due to Faulty Organiza- 
tion — General Oranization Charts — Charts for 
Organization of Work under the Foundry Fore- 
man 180 



CONTENTS 



Chapter X. Foundry Production and Its Details 
The Vital Purpose of Cost Accounting Is to 
Increase Production and Reduce Costs — Making 
the Working Conditions of a Foundry an Open 
Book — Commercial Production — Working Condi- 
tions — Classification and Symbolizing of Work 
— Detecting Delays — Time Analyses — Measuring 
Productivity — Averaging Output — Units of Pro- 
duction 196 

Chapter XL Efficient Despatching in the Foun- 
dry. 

The Magnitude of the Loss by Delays — A 
Simple Test of the Value of Despatching — How 
to Get the Most Work out of the Foundry — 
Classification of Articles Used — Classification of 
Conditions Affecting Work — Personnel Con- 
cerned — An Efficient Order Arrangement — Mak- 
ing and Carrying out Plans by Schedule — Work- 
ing Rules Concisely Stated 219 

Chapter XII. Handling Shop Details 

Qualities of the Efficient Manager — Foundry 
Work Analyzed into Its Primary Steps — The 
Things That Must Be Done Concisely Stated in 
Order — Planning out the Work— Work Order, 
Tally Card and Report — The System Clearly De- 
scribed — What It Accomplishes 245 

Chapter XIII. Importance of Correct Burden Ap- 
portionment 

Essential To Know Where, Why, and How 
Much We Have Made or Lost — Three Elements 
in the Cost of Good Castings — Three Typical 
Cases of Production Examined — Charts of Bur- 
den Distribution 268 

Chapter XIV. Elements of Foundry Production 
Costs 

Profits not Proportionate to Prices — Getting 
Results— Material Accounts — Operating Accounts 
— What Accounts Should Be Kept and What 
Goes into Each , 294 



VI CONTENTS 



Chapter XV. Apportionment of Foundry Costs to 
Production 

The Subdivision of Shop and Commercial 
Costs — Elements Entering into Direct Cost — 
Elements Entering into Indirect Cost — Elements 
Entering into Commercial Cost — The Items Dis- 
cussed — Chart of Apportionment to Product 318 

Chapter XVI. Cost Apportionment in Various 
Classes of Foundries 

Classification of the Foundry Industry — 
Several Ways of Treating Production Costs — 
Rules for Apportioning Costs in Various Cases 
— The Methods Codified and Explained 341 



MAXIMUM PRODUCTION IN MA- 
CHINE SHOP AND FOUNDRY 

Chapter I 

THE TWO GEEAT FORCES IN MANUFAC- 
TURING 

TT is extremely doubtful if the accountant 
A of a hundred years ago would recognize 
present-day accounting practice. He cer- 
tainly would be in no position to appreciate 
immediately the progress that has been made 
since his day, owing to the fact that he would 
be lost in the maze of bound books, loose- 
leaf devices, card systems, mechanical aids, 
controlling accounts, short cuts, special rul- 
ings, billing machines, and a hundred and one 
other things which go to make our Twentieth 
Century accounting practice. He would ad- 
mit, after he became familiar with the meth- 
ods used, that wonderful progress had been 
made since his time; but he would also be 

1 



2 MAXIMUM PRODUCTION 

impressed with the fact that many account- 
ing schemes, considered excellent, seriously 
approach the " worth next to nothing' ' 
point. 

There are a number of reasons for this. 
In many cases, the accounting is a mere 
jumble of figures, which have little or no 
value as a guide to the executive. In others, 
vital information is compiled only once a 
year, or if any attempt is made to furnish 
monthly statements, they are furnished so 
long after the close of a month that the in- 
formation contained in them represents so 
much waste effort— they are furnished too 
late to enable the executive to point out the 
reasons for certain inefficiencies. Then 
again, accounting schemes may furnish in- 
formation without regard to the require- 
ments of the business in question; or they 
may be changed materially from time to 
time, elaborated upon, "boiled down," new 
features added, others cut out— each new 
bookkeeper introducing a few " stunts " of 
his own, until he gets things to run his own 
way. Between all this and accounting 
schemes sold in " chunks,' ' and further the 
willingness of each auditor or accountant 
that comes along to point out where the ac- 



ANALYSIS AND CONSTRUCTION 3 

counting fails to furnish the required data 
—where it violates the rules of standard ac- 
counting practice— the scheme in a short 
time becomes hopelessly confused, render- 
ing intelligent comparison absolutely out of 
the question. Is it any wonder that a manu- 
facturer, after going through such an ex- 
perience, is far from being in a receptive at- 
titude when l ' accounting system ' ' is men- 
tioned to him? 

To present the right kind of information 
in the wrong manner is confusing and un- 
satisfactory. To present the wrong kind of 
information in the right manner is mislead- 
ing and dangerous. It would be far better 
for many simply to keep track of the cash 
on hand and what is due and owing, than to 
maintain an elaborate accounting arrange- 
ment which does not result in an accounting 
that can be used in bettering the business. 
A scratch pad, a pencil, and a good guess 
would be just as efficient. The right kind of 
information, rightly presented, is therefore 
the problem. 

As a declaration of principles, let us decide 
at the outset that an accounting scheme to 
be efficient must first of all consider the 
needs of the business in question; that it 



MAXIMUM PRODUCTION 



must be comprehensive, proceeding on the 
broad assumption that information should 
be given an opportunity of working for the 
executive— not a burial which may have no 
resurrection; that it must be designed to an- 
ticipate the needs of the executive in every 
possible way; that it must be planned not 
only to make possible a rapid comparison 
and analysis of the various elements, but to 
serve as a statistical bureau as well ; that the 
accounting must be simple to admit of its 
being easily understood and quickly oper- 
ated, in order that there may be no delay in 
getting the pertinent facts to the executive 
promptly; that it must be arranged so that 
unnecessary work and entries will be done 
away with, and in addition should be de- 
signed to furnish information during the 
month— a point of importance to every man- 
ager. At any rate, an accounting scheme 
which measures up to the above standard is 
entitled to consideration, for one of the pos- 
sibilities in the right kind of accounting 
methods is better and more complete infor- 
mation in quicker time and at less cost than 
is usually found. 

There can be no question, however, if one 
stops to review the past, that there has been 



ANALYSIS AND CONSTRUCTION 5 

and is now, on the part of a great many, al- 
together too ranch dependence placed in mere 
cost records and fignres ; for while they are 
necessary and of the ntmost importance, they 
must not be considered as being the only 
means to a desired end. A great many are 
satisfied when their cost fignres inform them 
regarding the disposition of their money, 
and in addition may be nsed as a check on 
their selling prices. Others go a step further 
and nse their information as a basis for com- 
parison between operation and operation, or 
of completed nnit with completed nnit, in 
order to detect fluctuations in an endeavor 
to keep costs down. Others use their figures 
for carefully checking up the departments, 
foremen, machines, operations, men, etc., in 
order to reach some conclusion, even if not 
altogether accurate, as to the efficiency of 
their plant. Still others have definite esti- 
mates or standards against which the actual 
performances are checked. How many are 
there, however, who use their facts and fig- 
ures for all the purposes mentioned? If all 
were using all of them, they would be bring- 
ing into play what I would term an " ana- 
lytical force' 7 — a process enabling them to 
apply remedies when their information de- 



6 MAXIMUM PRODUCTION 

veloped the fact that certain places needed 
prompt attention. 

An equally important force can be em- 
ployed with as great if not greater results— 
one which can be fittingly termed a "con- 
structive force," a building up process— 
which acting in harmony with the force just 
mentioned, finds ways and means to antici- 
pate as far as is possible the leaks and faulty 
conditions. One force is as vital and neces- 
sary as the other, although it is true, and 
unfortunately so, that very few get all the 
good possible out of both of them. Whether 
employed separately or together, they are 
made up of the following steps: — 

1.— Securing data. 
2.— Eecording the data secured. 
3.— Compiling the data in convenient 
shape for reference and study. 

4.— Seasoning applied to the compilations. 
5.— Conclusions based on the reasoning. 
6.— Action in some definite direction. 
7.— Results. 

The principal difference is that the ana- 
lytical force is concerned with figures and 
statistics showing what has been accom- 
plished, as a guide to future action and re- 



ANALYSIS AND CONSTRUCTION 7 

suits, while the constructive force is con- 
cerned with facts and information as to 
equipment, conditions, operations, men, etc., 
showing what should be accomplished in 
order to secure results. One force will of 
course do a great deal of good without the 
other, perhaps because of the fact that there 
remains, in modern manufacturing practice, 
a great deal to be done, but it should be seen 
that the two forces mentioned, working har- 
moniously along widely different lines with 
the same goal in view, will accomplish more 
in the way of results than either of the 
forces working independently. 

Mention was just made of the fact that a 
great deal remains to be done. How true this 
is no one knows better than those whose pro- 
fession it is to assist in getting all that is 
possible out of men, equipment, and ma- 
terials, and who are in a position to see, 
through close observation, where the faults 
lie and what will eliminate them. There is a 
task ahead of this great nation — a task of 
such magnitude as to warrant wise execu- 
tives giving it earnest and careful considera- 
tion, as well as to attract the attention of 
those who are in a position through training 
and natural ability to assist in solving its 



8 MAXIMUM PRODUCTION 

many problems — that of increasing the ef- 
ficiency of all human endeavor. 

We have graft and investigations of one 
kind or another nntil it would seem that 
there remained no such thing as civic pride; 
we hear on all sides constant reference to 
"high cost of living" with innumerable rea- 
sons therefor; we hear that railroads must 
raise their rates in order to protect them- 
selves, to which the shipper strenuously ob- 
jects as any such increase affects cost of pro- 
duction which would mean still higher 
prices; we see sufficient evidence of a far 
from diminishing dissatisfaction among the 
laboring classes resulting in constant strife 
between capital and labor. These and many 
other conditions which could be mentioned 
furnish sufficient evidence that something 
is decidedly wrong— that we are face to face 
with conditions which cannot exist continu- 
ously without disastrous results. 

This condition of affairs has been most ex- 
cellently described by H. L. Gantt:* 

With increase of prices comes higher cost of living ; 
with higher cost of living comes demand for higher 
wages; with higher wages comes higher cost of pro- 

*See "Work, Wages and Profits," by H. L. Gantt, The 
Engineering Magazine, New York. 



ANALYSIS AND CONSTRUCTION 9 

duction. Then to maintain the same profit under 
the new conditions, we must again increase our sell- 
ing prices and the cycle repeats itself. 

This vicious cycle is illustrated graphic- 
ally by the chart below. 





Increase 
in Prices 




Higher Producing ( 

Costa V j 




f \ Higher Cost of 
V J Living 




Demand for 
Increased Wages 


The Engineering Magazine 



FIG. 1, THE VICIOUS CYCLE OF INCREASING PRICES AND 
COSTS. 

What is the trouble? To me, two great 
faults seem to be responsible: first, extrava- 
gance and, second, impatience. The wide- 
spreading movement for the conservation of 
our natural resources is sufficient evidence 
that as a people we are extravagant, and no 
one, after due consideration, will deny the 



10 MAXIMUM PRODUCTION" 

fact that in our lmrry to get things done — 
to see results— to turn time and material into 
cash — impatience is largely responsible, both 
faults being the result of our present system 
of organization and management, as will be 
evident to anyone who will take the time to 
read carefully Harrington Emerson's "The 
Twelve Principles of Efficiency."* 

As a people we have come to the realiza- 
tion of the importance of conserving our 
natural resources, and as a result we now 
have this matter as one of our lively issues, 
forcing the attention of our able men. What 
we need, however, and at once, is a move- 
ment for the conservation of our resources 
other than water power, minerals, timber, 
etc., which would mean decided benefits. 
This would involve: 



1.— Increased production. 
2.— Lower production costs. 
3.— Decrease in prices. 
4.— Lower cost of living. 



as an offset 
to the condi- 
tion pictured 
in the chart. 



We need most of all to hear more about 
inefficiency and less about efficiency. We 
like the latter word so well that we use it 
without much thought as to its real mean- 

♦Published by The Engineering Magazine, New York. 



ANALYSIS AND CONSTRUCTION 11 

ing. If we talk about the inefficiencies more, 
our efforts towards eliminating them will be 
increased, and efficiency, as a natural result, 
takes care of itself. Inefficiency is an un- 
healthy state of affairs— a disease in other 
words — just as susceptible to diagnosis and 
treatment as any unhealthy condition. If 
diagnosis and treatment are withheld, how- 
ever, decay and death is the result — a law 
which is no different in its relation to the in- 
dustrial body than to the physical body. 

Efficiency in the best acceptance of the 
term means more than simply doing things 
well — I might say, thinking or guessing that 
they have been done well; it is the positive 
relation or ratio between a possible accom- 
plishment — an ideal, a standard — and the 
actual attainment. We have had altogether 
too much imagined efficiency and not enough 
of the cold, mathematical, relative determi- 
nation. The great trouble has been that 
standards have not been properly set, or if 
set no consistent effort is made to assist those 
responsible for results in attaining them. 
Consequently we have accomplishments that 
are not what they should be, which if re- 
duced to. a relative basis would show that 
inefficiencies are still "on the job." For 



12 MAXIMUM PRODUCTION 

this the management of the enterprise is 
largely to blame. Instead of beginning at 
the bottom and setting standards for each 
and every part of the work— whether it be 
operation or condition— entering into mak- 
ing a business successful, they begin at the 
top and fix in their own minds a final stand- 
ard as regards what they want accomplished, 
after which they promptly proceed to un- 
load all responsibility onto the shoulders of 
others— everyone all along the line, down to 
the workers themselves, having a hazy idea 
as regards what is really expected of them; 
and as "anybody's task is nobody's work" 
it stands to reason that the final attainment 
cannot measure up to the expectation. This 
however does not seem to relieve those who 
have failed to accomplish what was wanted 
from their share in the session "behind 
closed doors." 

In recent years, a great deal of attention 
has been devoted to "waste products" — a 
number of establishments having their own 
corps of experts, who do nothing but analyze 
and study the wastes previously considered 
as possessing little or no value, with the re- 
sult that the markets today are filled with 
"by-products" of every kind and descrip- 



ANALYSIS AND CONSTRUCTION 13 

tion producing a revenue which pays excel- 
lent dividends on the cost of their marketing. 

In all industrial pursuits, there are many 
wastes which can be made to yield satisfac- 
tory returns. Careful investigation in the 
majority of institutions will soon disclose the 
fact that the chief wastes are due to time 
losses, wasted materials, too much equip- 
ment, lack of intelligent planning, poor and 
insufficient facilities, equipment improperly 
maintained, etc. A costly bridge is erected, 
not because it was impossible to cross before, 
but because crossing is facilitated and made 
easier with the bridge than without it, and 
as a result all share in the benefits. If, then, 
we place a force at work which will turn the 
wastes into products, we erect a structure 
which enables the consumer as well as the 
maker of the products to share in the bene- 
fits that always accrue through turning out 
more in less time. 

A successful organization is one which 
considers the fact that the "constructive 
force" is a building force, and as it takes 
time to erect any structure, results must not 
be expected in a minute; that it should be 
composed of men who can give their time 
and attention to the careful study of the 



14 MAXIMUM PRODUCTION 

wastes, or be assisted by men who are expert 
in analyzing and bringing np for attention 
the weaknesses of the industrial body; that 
the hearty cooperation of the ones who own 
and operate the business is vital and neces- 
sary, in carrying to a successful issue the 
proposed ways to greater results. It should 
first see that the working conditions are 
what they should be; that the equipment is 
placed in the best possible shape for maxi- 
mum production ; that the men are furnished 
with the best facilities in order to enable 
them to take every advantage of the im- 
proved conditions and equipment; that the 
work, in its various details, is planned ahead 
and scheduled s.o that delays and annoyances 
can be eliminated; that careful observation 
is made as to time and materials consumed 
in order that suitable standards may be ar- 
rived at, against which accomplishment may 
be measured; that advice and instructions 
are given in order to assist the various per- 
sons interested in attaining the standards 
set; that suitable records are maintained in 
order that the management may know ex- 
actly what is being accomplished; that those 
who measure up to the expectations are re- 
warded in proportion as they assist in 



ANALYSIS AND CONSTRUCTION" 15 

converting " waste products" into "by- 
products. ' ' 

As will be easily seen, the above is not the 
usual procedure in the majority of enter- 
prises. The usual course is to engage a man- 
ager; to allow him a limited time in which 
to get acquainted with the conditions and 
the product, and after that to tell him to go 
ahead and get results. His time is devoted 
to securing business; pushing the work 
through the shops— many times regardless 
of the cost; running a "diplomacy bureau" 
for the benefit of the customers; worrying 
about finances and getting customers to pay 
their bills; listening to complaints from his 
men; settling disputes and quarrels, and a 
thousand and one other things that an ex- 
ecutive is. called upon to do in the course of 
seven or eight hours daily. While so busily 
engaged, in spite of the fact that he may 
have facts and figures in abundance regard- 
ing what has been and is being done (which 
he uses as best he can when he has a little 
time), it is easy to appreciate how it is pos- 
sible, in the absence of a well-organized at- 
tempt to convert wastes into cash, for time 
to be lost, money thrown away, materials 
scrapped, etc., all because industrial en- 



16 MAXIMUM PRODUCTION 

deavor seems to be conducted on the assump- 
tion that the more detail a man can look 
after in the course of a day, the greater he is 
as an executive and the more he should be 
able to accomplish. As a matter of fact 
there is a limit to the amount of detail a man 
can handle, but practically no limit to the 
supervision that he can exercise. 

Supply the executive with proper records 
and a staff of men who can assist him in lo- 
cating and eliminating wastes and inefficien- 
cies; make him a supervising agent, not a 
drudge; furnish him two good strong arms 
with which to work— one the "analytical 
force" with which he can study the past and 
present as a guide to the future— the other 
the "constructive force" with which he can 
improve and build new structures, and the 
"By-Products Department" will pay divi- 
dends far in excess of the cost involved. Un- 
less this is generally conceded to be the 
proper scheme of management— and not only 
conceded but generally adopted — we are 
going to have with us, as a destructive fac- 
tor, the condition of affairs so clearly pic- 
tured in the chart. 



Chapter II 

IMPORTANCE OF EFFICIENT ORGANIZA- 
TION 

TF consideration is given to the analogy 
■*- between the business machine (the man- 
ufacturing enterprise) and the fighting ma- 
chine (the company of soldiers) the impor- 
tance of "Organization" is at once apparent. 
A company of soldiers will accomplish re- 
sults in the surest and swiftest way simply 
because they are well organized and properly 
supervised. From the captain to the pri- 
vates, through the lieutenants, the sergeants, 
and the corporals, the orders are given and 
executed methodically without confusion, de- 
lay, and misinterpretation; and in the man- 
ufacturing enterprise, the orders can be 
given and executed methodically without 
confusion, delay and misinterpretation— if, 
in the growth of the business, in its evolu- 
tion from the old order of things to the new, 
proper consideration has been given to the 
importance of a well trained and efficient 
organization. I do not maintain that it is 

17 



18 MAXIMUM PRODUCTION 

possible for the manufacturing enterprise to 
attain that high degree of efficiency enjoyed 
by the army company, but I do most em- 
phatically maintain that it would be possible 
for more manufacturers to be more success- 
ful than they are if they would inject some 
sort of organization and supervision into 
their business, instead of conducting it in 
the hap-hazard, disjointed, hit or miss, aim- 
at-the-ground-hope-to-hit-the-stars way of 
which so many are guilty. To this class the 
mere mention of the word " organization" 
elicits the cry "red tape," although if one 
of them would once consent to have some of 
this kind of tape wound around his business, 
the results would be so startling as to win 
him to the side of those who had attained 
success through a well systematized organiza- 
tion and from whom he could learn how to 
conduct his own business properly if he 
would but once get away from his habit of 
jumping over dollars in an endeavor to save 
pennies. 

If space permitted, we might go into the 
details regarding the evolution of business 
in general, from the primitive stage of bar- 
ter to its present immense propositions. In 
its early stages business was most simple. 



EFFICIENT ORGANIZATION 19 

If a man had something his neighbor needed 
and he needed something his neighbor had, 
a trade was effected ; or if a man had several 
things of like nature, he sold them to others 
for whatever suited his requirements. As 
the demand for various articles increased, 
however, it was found necessary to specialize 
in a small way, but in a way which enabled 
a man to devote his entire time and attention 
to the manufacture of one thing. During 
this stage of business development, it was an 
easy matter for the proprietor of the little 
establishment to give his attention to the 
various details; in fact, we can safely say 
that he carried his office " under his hat." 
As we approach the next stage, we find that 
conditions, becoming a trifle more complex, 
necessitated a radical departure, and that 
instead of one man looking after every de- 
tail, the work has been rearranged so that 
at least two men divide the responsibility. 
Tracing still further, we will find that as the 
volume of business expanded, the amount of 
detail work necessary to accomplish results 
assumed such proportions as to make it ut- 
terly impossible for a few men to manage a 
business properly. At this stage segrega- 
tion was an absolute necessity, and today 



20 MAXIMUM PRODUCTION 

manufacturing enterprises, while still a unit, 
are divided into two distinct branches— the 
commercial and engineering— these branches 
being again divided into departments and 
sub-departments. 

While business as it is now conducted is 
not as simple as it was in the barter days, 
it must not be inferred that this segregation 
of authority is synonymous with complexity, 
for its very purpose has been to simplify and 
this is what it has accomplished. It is only 
where this segregation has been the result 
of lack of thought and proper attention that 
we find a complex and unsatisfactory condi- 
tion of affairs. In fact, there is all about us 
sufficient evidence that many commercial en- 
terprises are being conducted along lines 
that, as far as evolutionary development is 
concerned, are several stages behind the 
times. 

Let us suppose a case, which will apply in 
a greater or less degree to the majority. In 
the earlier development, we will say that the 
founder of the business was able, on account 
of its small size, to make what sketches he 
needed, solicit orders, see that they were 
filled, perhaps take a hand at the making if 
occasion required, see to the shipments, and 



EFFICIENT ORGANIZATION 21 

attend to the collections and the keeping of 
his few accounts. He finds that business 
grows, and eventually places a man in charge 
of certain branches while he looks after 
others. The accounts eventually require 
more attention than he can give them so he 
engages a bookkeeper in order that he may 
be relieved of this work. He finds that the 
quantity of materials received and shipped 
amount to enough to warrant a receiving 
clerk as well as a shipping clerk, and to 
handle this material from its inception to 
shipment he conceives the idea of placing a 
man in charge as stock clerk. He then adds 
a purchasing agent, in order that he may be 
relieved of the detail and that the purchases 
may be made most economically; a man is 
placed in charge of the orders— foremen are 
placed in charge of certain men in the shops 
—the details connected with making plans, 
drawings, estimates, etc., are taken over by 
a practical man— his manager is given a per- 
son to look after the shops or engineering 
branch, while the commercial branch with 
its many details is placed in the hands of an- 
other. As the evolution continues, the sell- 
ing function is assumed by one man — cost 
details are looked after by another— a chief 



22 MAXIMUM PRODUCTION 

inspector is added in order that all work may 
be shipped according to specifications— the 
engineer, who before had been a sort of jack 
of all trades, is placed in charge of certain 
work while an electrician is engaged to look 
after this particular work— and so this seg- 
regation continues with the development of 
the business. 

Perhaps it is not to be wondered at that 
the founder, in looking backward, is inclined 
to pat himself on the back when, in a remi- 
niscent mood, he considers what he terms 
"remarkable progress.' ' He considers that 
he has been wonderfully successful in build- 
ing up a business which at the beginning was 
so small as to admit of his supervising every 
detail, while today he employs a dozen men 
to do the work he once did. There is no 
getting away from the fact that it is this 
feeling of self-satisfaction that is responsible 
for a large number of faulty organizations, 
for if we should tell this manufacturer that 
his business is far from being as successful 
as it is possible for it to be he would be very 
much surprised and perhaps angered— in 
fact, he would vigorously resent any such ac- 
cusation; but it is not the success it should 
be for the very reason that the development 



EFFICIENT ORGANIZATION 23 

has been allowed to take care of itself. New 
men were added, new offices created, only 
when absolutely necessary, each newcomer 
being given a general idea of what was ex- 
pected of him; and not knowing, not think- 
ing, or perhaps not having the time to give 
more than passing attention to the matter, 
the proprietor did not consider the fact that 
his business was a unit, with each worker a 
part, having a distinct relation with every 
other worker. Hence as the efficiency of any 
organization is directly in proportion to the 
care with which these relations are con- 
sidered and treated, his organization natu- 
rally fails to attain that degree of efficiency 
obtainable, and for this condition he and he 
only is responsible. As a result, we find in 
.his establishment a condition of affairs that, 
shown graphically on paper, looks like Fig- 
ure 2. We have here an organization com- 
posed of managers and heads of departments, 
but we also have a confused organization in 
that no one really knows where his authority 
begins or ends. Consequently, there is no 
sequence, order, or harmony, and without 
these it is impossible to obtain maximum re- 
sults. 

If, on the other hand, the proprietor had 



24 MAXIMUM PRODUCTION 



Treasurer 



[7} Coat Clerk 

/ / [7] Sales Agent 
/// 
/ if JTlBook Keepe 

/ /j/ _p Order Clerk 

/ / / I* / pgead oienogrrphei 




f-Q^/' x //^>>" \\ \---E] Chief Drattoman 

I / ^v- pjfe r-J--^--A-\---E]Beceivlng Clerk 



Stock Clerk 



\\v*s Lj8hlpplng 
^1 Foreman. 



president 

i Clerk 



\V\Y\ 

\ \\\ 



Foreman 



\\ [[] Chief Inspector 
Q Time Keeper 



TV Eng. Mmgmmm 

FIG. 2. AN ILLUSTRATION OF POOR ORGANIZATION. 

given due consideration, during the growth 
of his business, to the importance of a well 
regulated organization— if he had realized 
that more could be accomplished through an 
intelligent supervision than through a super- 
vision where one authority conflicts with 



EFFICIENT ORGANIZATION 



25 



another— his organization could then be 
graphically shown by Figure 3. Compare 
these two charts, and the difference between 



rO 



Board of o 






Manager 
-1 I Secretary 



o 






' The £ng. Magatii* 

FIG. 3. DIAGRAM SUGGESTING AN ORDERLY AND EFFICIENT 
ORGANIZATION. 



26 MAXIMUM PRODUCTION 

an enterprise well organized and properly 
supervised and an enterprise in which, the 
opposite is the case will be apparent with- 
out further argument. Enterprises like the 
one shown in Figure 2 fail to appreciate the 
importance of classifying work and duties 
under their proper authorities, and naturally 
the result cannot help but be confusion, con- 
flicting orders, arguments, etc.; while the 
value of an organization like the one shown 
in Figure 3 lies in the fact that work and 
duties have been properly classified and 
placed under authorities most competent to 
handle them, the effect of which is to reduce 
to a minimum the friction between the dif- 
ferent workers, as well as to enable them to 
accomplish a maximum amount of work in 
the shortest time possible. 

It is not the purpose of this chapter to go 
into details as to work, duties, responsibili- 
ties, or authorities. Each establishment has 
its own peculiar conditions— its own special 
needs— and the introduction of methods or 
systems must be made only after careful 
thought and application. The fact remains 
however that no matter how complex the ex- 
isting conditions in any enterprise may be, 
the matter of properly organizing it is not as 



EFFICIENT ORGANIZATION 27 

difficult as might be imagined, and if the 
work is started and carried on in the right 
way it can be accomplished within a short 
time with gratifying results. 

A man is hired and receives wages or a 
salary, as the case may be, for a distinct pur- 
pose—to perform certain duties, and upon 
the thoroughness with which he performs 
these duties depends his success; but he de- 
pends in turn upon the clearness with which 
these duties are defined— upon full knowl- 
edge as to whom to look to and who are to 
look to him; yet this part of the contract 
never receives any consideration at all from 
many manufacturers. It is therefore of 
primary importance, in organizing a busi- 
ness, that a complete list of work and duties 
be compiled. Provision should then be made 
for placing these duties in charge of those 
most competent to handle them, after which 
it should be decided who shall direct and 
supervise. It is then an easy matter to 
classify the details under the proper authori- 
ties and we can then draw up an organiza- 
tion chart along the lines shown in Figure 3. 

The list shown on page 28 was designed to 
provide a means of enabling a manufacturer 
to compile duties and then designate the ones 



28 



MAXIMUM PRODUCTION 



LIST OF DUTIES AND OFFICERS TO WHOM THEY ARE A8SIGNED. 



Work and Duties. Under the 

Direction of 

The figuring of depreciations Business Manager 

Purchase of special machinery . . General Manager 

Purchase|of materials and supplies Purchasing Agent 

Banking arrangements General Manager 

The checking of invoices with 

materials received Receiving Clerk 

Checking invoices for payment . . Book Keeper 

Notes Book Keeper 

Fire protection'. '.'.'. Works Manager 

Appointment of those under com- 

mercial authority Business Manager 

Appointment of those under 

manufacturing authority Works Manager 

Compilation of sales prices Sales Agent 

Passing on requisitions for ma- 
terials and supplies: 

Engineering branch Works Manager 

Commercial branch Business Manager 

The following of purchase orders . . .Purchasing Agent 

The issuing of all shipping orders . Chief Order Clerk 

Billing materials shipped Book Keeper 

Experimental work Works Manager 

All issuing of materials on written 

requisition : ■ Stock Clerk 

Maintenance and operation of _,,.,_ . 

power units Chief Engineer 

The inspection of all work Chief Inspector 

New designs and changes Chief Draftsman 

Statements Book Keeper 

Payment of all bills Business Manager 

Collections up to the point of suit. Book Keeper 

Collections from the point of suit . Business Manager 

Ordering of new parts to replace Chief Order Clerk 

Creation of systems 9p? e /^ Manager 

Issuing manufacturing orders . . . Chief Order Clerk 

All filing " H 4- Stenographer 

Handling materials for shipment . Shipping Clerk 
The maintenance of proper stock 

margins • Stock Clerk 

The determining of proper stock 

margins Works Manager 

Execution of shipments from . 

written orders Shipping Clerk 

Sanitary and plumbing arrange- 

men t s Works Manager 

Transportation Shipping Clerk 

Advertising contracts Sales Agent 

Passing on credits • Book Keeper 

Maintenance and operation of 

electrical equipment. Chief Electrician 

Execution of work on time: 

| Works' Manager 
In charge of committee com- J Chief Order Clerk 

prising | Stock Clerk 

I Shipping Clerk 

The tracing of all shipments Chief Order Clerk 



Under the 
Supervision of 
General Manager 
Advisory Com. ■ 
Business Manager 
Advisory Com. 

Works Manager 
Business Manager 
Business Manager 
General Manager 

General Manager 

General Manager 
Business Manager 



General Manager 
General Manager 
Business Manager 
Business Manager 
Business Manager 
General Manager 

Works Manager 

Works Manager 
Works Manager 
Works Manager 
Business Manager 
General Manager 
Business Manager 
General Manager 
Business Manager 
Advisory Com. 
Business Manager 
Business Manager 
Works Manager 

Works Manager 

General Manager 

Works Manager 

General Manager 
Works Manager 
Business Manager 
Business Manager 

Works Manager 



General Manager 
Business Manager 



EFFICIENT ORGANIZATION 29 

to look after and supervise them. The en- 
tries shown have been selected at random— 
the list has been purposely made incomplete 
on account of lack of space, and is simply 
suggestive in nature. After a complete list 
has been made, the work of classifying 
under proper headings is a simple matter 
but one of great importance, as the follow- 
ing will show:— 

Book Keeper, under the supervision of Business 
Manager, final authority General Manager — 
shall have full charge of all bookkeeping, the giving 
of all notes, the issuing of statements, the billing of 
all materials shipped, the handling of all invoices re- 
ceived — their checking and passing for payment, cash, 
the disbursing of money when advised to do so by 
the Business Manager, pay rolls, time accounts, pass- 
ing on credits, the enforcing of all collections up to 
the point where legal assistance is necessary, the hir- 
ing, paying, and full charge of assistant bookkeepers, 
bill clerks or whomever it may be necessary for him 
to engage in order to manage his department prop- 
erly; the arrangement, classification, and handling 
of his accounts, the right to employ whatever meth- 
ods he may elect without changing the general scheme 
of the accounting; and while possessing no authority 
outside of his own department, he shall have the 
right to collect such data as are or will be necessary 
for him properly to compile statements as to the 
general or detailed conditions of the business. 

After this task is completed, the chart of 
organization can be quickly made, and we 



30 MAXIMUM PRODUCTION 

then have the proper foundation for an ef- 
ficient organization. By following the sug- 
gestions outlined, a means is provided 
whereby conflict of authority would be al- 
most entirely eliminated with friction 
greatly lessened, as we have supplied a lubri- 
cant; and as we have succeeded in arrang- 
ing the various forces in the most logical 
way, as well as provided for their care in 
the most careful manner, it is well within 
the range of reason to expect a maximum 
production through this factor— " Effective 
Organization." 



Chapter III 

THE ELEMENTS OF ACCOUNTING AND 
MANAGEMENT 

""O ESULTS of action vary as knowledge 
■"*■ increases or decreases," the moral 
of which is — know what is going on. Any 
industrial undertaking is operated for profit, 
by men who do not start out with the definite 
intention of having the venture eventually 
prove a failure. They expect to be success- 
ful and to make money for themselves and 
for those who may be associated with 
them in the business. Theoretically, then, 
there should be no such thing as failures; 
but the mere fact that each year adds its 
number of industrial wrecks to the large 
number that have preceded them, simply em- 
phasizes the fact that action has been the re- 
sult of a lack of, or the wrong kind of, knowl- 
edge. 

The simple elements of any business, if an- 
alyzed and studied, will show how necessary 
it is, if success and profit is to be attained, 
to have the right kind of knowledge, fur- 
31 



33 MAXIMUM PRODUCTION 

nished in the right manner, at the right 
time. 

Elements must always be recognized be- 
fore knowledge can be complete. Mathe- 
matics would not be mastered in a thousand 
years if calculus was the starting point, yet 
it is possible to go into plant after plant and 
find a most hazy idea as regards what con- 
stitutes the elements of the business; and 
where an element is recognized, a great di- 
versity of opinion as to its correct definition 
is likely to be met with. The purpose of this 
chapter is therefore to pick out, to define, 
and to attempt as far as possible to reduce to 
some sort of standard practice, the principal 
elements entering into the successful opera- 
tion and management of a business, in order 
that the many possibilities in the two forces 
discussed in the opening chapter — the " ana- 
lytical " and the "constructive"— may be 
used to advantage by the executive. 

The purpose of any business is to make a 
salable commodity, and the elements which 
go to make its output or production are: — 

1. Articles made for sale to the trade or 
to the company of which it is a part, or to 
both, which we will term "Commercial Pro- 
duction." 



ACCOUNTING AND MANAGEMENT 33 

2. Articles made for the use of the plant 
itself, which we will term "Shop-Use Pro- 
duction. ' ' 

If we attempt to analyze these elements, 
we shall find that the first is one that is easily 
understood, as it includes only such items as 
will produce a direct revenue on which a 
profit or loss is made. The second is made up 
of several other elements which can be 
picked out and defined, if consideration is 
given to the following: 

While the definite aim of the management 
is to make and to sell as much as possible, 
every executive is confronted with the ne- 
cessity of periodically replacing or renewing 
or repairing certain parts of his plant and 
its equipment, which leads us to the state- 
ment; in order to produce to advantage, we 
must maintain that which makes our pro- 
duction possible. We have still another con- 
sideration. The ambition of every manager 
is constantly to increase his volume of pro- 
duction, and depending upon his success in 
realizing his ambition, we find that he is 
forced to add new equipment, to build addi- 
tions, and in other ways to place himself in 
position to supply his trade with their re- 
quirements. This gives us the thought— to 



34 MAXIMUM PRODUCTION 

expand so as to produce more, it is necessary 
to construct that which will make a greater 
production and an increased volume of sales 
possible. This construction is of two kinds, 
although this fact is not generally recog- 
nized, the distinction being determined by 
the consideration whether the construction 
is something altogether new or simply the 
changing of something that has already ex- 
isted. We will term these two kinds, A — 
New Construction, and B — Reconstruction. 

In every plant it is necessary to do special 
work for customers, for which a price is 
charged — another element which we must 
consider. Still another is made up of such 
items as cannot be classed with any of the 
elements which have just been pointed out, 
and as consideration will show that such an 
element could not be classed as a revenue- 
producing or an asset element, it must be 
classified as expense. Our division of en- 
deavor, common to all industries, would 
therefore be as follows: — 

1. Commercial Production. 

2. Maintenance. 

3. Construction— 

A New Construction. 
B Reconstruction. 



ACCOUNTING AND MANAGEMENT 35 

(Elements of Production, Continued) 

4. Special Work Chargeable to Cus- 

tomers. 

5. Expense. 

After the principal elements have been 
pointed out, the task of next importance is 
to have them intelligently control the num- 
berless details that are met with, which must 
be switched onto one or more of the five main 
tracks mentioned. In the South Terminal 
Station in Boston, there are twenty-eight 
tracks which are connected with the outer 
network of tracks by switches, and upon the 
correctness with which these switches are 
manipulated by the operators depends the 
safety of hundreds of passenger trains which 
enter and leave this station daily. There 
would be absolutely no excuse for an oper- 
ator to make the statement that he was not 
sure which one of the twenty-eight tracks a 
certain train was to enter upon. Likewise, 
it is just as necessary, in order to prevent 
costly mistakes, false impressions, danger- 
ous conclusions, etc., to switch the details 
that are met with daily onto the right tracks. 
How little attention has been given to this 
particular consideration of the subject, how- 



36 MAXIMUM PRODUCTION - 

ever, would be evident to anyone who could 
have the opportunity of placing together, for 
comparison, the handling of the details in a 
hundred plants. It is safe to say that the 
variety would he most surprising and would 
be one means of showing why the average 
enterprise is so inefficient. 

The much discussed topic "depreciation" 
plays such an important part in the proper 
understanding of the elementary factors of 
a manufacturing business that it was deemed 
advisable to take up the discussion of this 
subject somewhat in detail. 

Keister, an authority on corporation ac- 
counting, defines depreciation as:— 

The actual loss upon assets which are diminishing 
in value, or an estimated sum charged against gross 
revenue, which amount is considered sufficient to re- 
place the capital used up or reduced by wear and tear. 

L. S. Eandolph, in a recent paper in The 
Engineering Magazine, * defines it as fol- 
lows:— 

The fall in value from any cause whatever, the es- 
sential element being that the machine or structure 
becomes obsolete. 

In other words, the common understand- 

* August, 1910. Ethical Aspects of the Allowance 
for Depreciation. 



ACCOUNTING AND MANAGEMENT 37 

ing of the subject seems to be that deprecia- 
tion is:— 

The provision made to maintain the book value 
of an item on a level with the diminishing value of 
the item, due to its usage or other reasons. 

It must be an intensely optimistic mind 
that can see no depreciation in what he pos- 
sesses. Such minds do exist, for the author 
was once told by a shrewd manager that 
there was no such thing as depreciation ; that 
as long as he kept whatever he had in good 
condition, it was as good as the day he pur- 
chased it and therefore worth what had been 
expended for it. A foundryman, citing the 
tumbling barrels in his cleaning room as an 
example, stated that he considered that there 
was no wear out to them, for whenever staves 
were broken, he promptly replaced them, 
which made the barrels as serviceable as 
ever. Excellent viewpoints, both of them, but 
in error just the same. 

Let us outline a case which will serve as 
an illustration. Assume for instance that a 
horse had been purchased for $350 and for a 
period of years did all that any horse could 
do, during which time it was fed regularly, 
shod when necessary, occasionally received 
a "doctoring up," Eventually, however, on 



38 MAXIMUM PRODUCTION 

account of the age of the horse, disease, or 
other reasons, it has to be sold, $50 being all 
that it will bring, and to take its place an- 
other horse has to be purchased, for which a 
price of $250 is paid. Assuming the con- 
sideration had been that the value of the 
horse did not diminish, in which case no de- 
preciation charge was ever entered, and we 
find in our assets an item of $350 year in and 
year out. Finally, when the horse is sold and 
the new one purchased, we credit the assets 
for the salvage of $50, but charge it with the 
$250 expended for the new horse, so that the 
account stands — 

Old horse $350.00 

New horse 250.00 

Total $600.00 

Eeceived for old horse 50.00 

Balance in account $550.00 

Value of new horse 250.00 

Difference $300.00 

Here we have $300 in the assets account 
for which there is no value whatever. The 
only thing to do is to write the amount into 
profit and loss and the executive can say to 
his stockholders: 



ACCOUNTING AND MANAGEMENT 39 

Gentlemen: I had to sell our old horse and pur- 
chase a new one. After just paying $250 for the 
new horse, I find the value of the old horse still in 
our assets, so will have to carry it into profit and 
loss — hence you will have to go into your own pock- 
ets this year to pay for the new horse and in addi- 
tion stand the difference between the value of the 
old horse less the salvage and the value of the new 
horse. 

Such an explanation would certainly not 
appeal to the stockholders, in fact their reply 
would probably be: 

You should not have allowed this replacement and 
loss to come out of this year. If the decreasing value 
of the horse had been offset by a depreciation charge 
and this amount absorbed yearly by our cost of pro- 
duction, our customers would have paid for it the 
same as they pay for the labor and material which 
enters into their product. If this had been done, not 
only would our profit have been about the same dur- 
ing the years we have had the horse, but when the 
time came to purchase the new one, there would have 
been enough in reserve to take care of the purchase 
without calling upon us to do so. 

From this statement, two conclusions are 
forthcoming:— 

1. The customers, not the stockholders, 
should have paid for the horse. 

2. By making "cost of production' ' ab- 
sorb the cost of the old horse, less the sal- 
vage, the expenditure would have been re- 
turned to the business. 



40 MAXIMUM PRODUCTION 

A study of this leads to the conviction that 
one phase of the subject which has never re- 
ceived the proper amount of consideration is 
the fact that regardless of all questions of 
replacements, diminishing values, wear and 
tear and reserves, whatever is produced for 
commercial use should absorb all that en- 
ters into making that production possible, 
whether it is the wages paid to the work- 
men or the cost of the machinery; expendi- 
tures for materials used, or what has been 
spent for erecting buildings. In other words, 
whatever is produced uses, in some form or 
other, the various items in the list of assets 
and should be assessed with its proportion of 
the cost of these items. The wages paid the 
driver of the horse we were just discussing 
is entered every month against the produc- 
tion of the month. "Why not some part of 
the cost of the horse? If the $65 per month, 
paid to the driver should be left out of the 
consideration, through an error, what a stir 
would be raised because of the carelessness 
of some clerk! But what is said if the cost 
of the horse stays buried in the assets month 
in and month out? 

A foundryman purchases a moulding ma- 
chine for $1,000, which he promptly proceeds 



ACCOUNTING AND MANAGEMENT 41 

to charge to his assets. He engages a 
moulder to operate this machine, and im- 
mediately the machine and man become a 
unit in turning out production. The foun- 
dryman charges the wages paid the moulder 
against the production of the machine, being 
very careful that the distribution of the labor 
is as correct as possible. He may be of the 
opinion, as many f oundrymen are, that there 
is very little depreciation in a foundry— he 
may believe there is none at all; and as a re- 
sult, a very small charge for depreciation is 
entered against the production of man and 
machine— perhaps nothing. If it is logical 
to charge wages against the production, it is 
just as logical to make this production bear 
its share of the cost of the machine. The 
only difference existing is the fact that the 
workman receives his wages weekly at so 
much per day while the machine is paid for 
in advance. 

The analogy existing between man and 
machine is worthy of mention. Assuming for 
purposes of comparison that a man contracts, 
with a concern or its successors, to give it his 
services for a period of ten years, at $1,500 
per year, the entire sum to be paid upon sign- 
ing the contract, which provides that in case 



42 MAXIMUM PRODUCTION 

the man is able to continue on for an addi- 
tional five years, he is to do so for no extra 
compensation, the man in turn being guar- 
anteed against deductions for sickness, vaca- 
tions, etc., the concern to waive all claim to 
any part of the $15,000 in case of the death of 
the man. What difference is there in the con- 
dition when a machine tool is purchased? 
The builders of the tool contract with the 
concern wanting the tool, to give it the serv- 
ice of the machine for $15,000, their estimate 
being that the machine will last ten years 
with ordinary usage. If the machine lasts 
fifteen years, no extra amount is forthcoming 
to the tool builder. If the tool is out of com- 
mission for repairs or because there is no 
work, the concern gets nothing from the tool 
builder. If the machine wears out before the 
stipulated ten years, the concern loses, al- 
though there would be some salvage in the 
disposition of the discarded machine, which 
would not be the case should the workman 
die— the only point where the comparison 
does not hold. 

The concern might feel justified in taking 
the stand that there was little or no deprecia- 
tion as far as the machine was concerned, but 
what a difference there would be as regards 



ACCOUNTING AND MANAGEMENT 43 

the man. Not one of the 120 months would 
pass without a charge of $125 being assessed 
against the business for the month. If the 
nature of the work was such as to admit of 
its being distributed to some specific line of 
production, this would be done; if this were 
not possible, then it would go into the general 
expense of conducting the business, but it 
would be included without question, for 
would not the contention be that the amount 
expended for the man is a part of the direct 
or indirect cost of production? Most as- 
suredly it would, and rightly so. 

Three things could happen to the man— 

1.— He might be off sick from time to time, 
occasionally going away on a vacation (cor- 
responding to a machine being down for re- 
pairs or not in operation because of lack of 
work). 

2.— He might die before the ten years are 
up (corresponding to a machine being dis- 
carded before it has given its full measure 
of usefulness). 

3.— He might work for the ten years and 
then continue for a few years longer (cor- 
responding to the machine lasting longer 
than anticipated). 

As regards No. 1, it is evident that the 



44 MAXIMUM PRODUCTION 

charge must be made against general ex- 
pense. In the case No. 2, if the man dies be- 
fore the stipulated time, there are only two 
courses open to the concern. 

A.— Write the undistributed portion into 
profit and loss, thereby closing the transac- 
tion. 

B.— Allow the undistributed portion to be 
absorbed, year by year, according to the 
schedule originally mapped out. 

In case No. 3, we have the opposite of case 
No. 2— the man working longer than was ex- 
pected. As the $15,000 has already been ab- 
sorbed by the ten years during which he 
worked, there remains nothing further to ab- 
sorb, consequently the services of the man 
from the ten years until he stops are a clear 
gain to the company. 

Substituting buildings, machinery, and 
general equipment for the man cited in the 
illustration, we are bound to reach the same 
conclusions, and, while the comparison is con- 
trary to all reason, it was used because a 
person interested would see, in comparing 
man with machine, that the machine would 
have to be handled in the same manner as 
the man. 

An opposite viewpoint is equally interest- 



ACCOUNTING AND MANAGEMENT 45 

ing. If the concern could contract for the 
buildings, all machinery and equipment, etc., 
on the basis of monthly payments, for the 
period of years corresponding to the life of 
the items (assets on a man basis), it is ob- 
vious that there would be no assets at all, for 
the concern would own nothing until full pay- 
ments had been made. The procedure would 
be most simple. The cost of production of 
each month would absorb the monthly pay- 
ments on plant, the same as it would absorb 
wages, cost of material, and the general ex- 
penses. When all payments had been made 
and the concern owned everything free and 
clear, it would be found that the production 
had paid for everything. If the concern had 
started out with capital to purchase their 
plant but had contracted as above outlined, 
it would also be found that the original cap- 
ital was intact, as during the years, assum- 
ing the business to be profitable, the cus- 
tomers would have paid enough to take care 
of the cost of the production including 
charges for plant, plus a profit for the stock- 
holders. 

From these two illustrations— opposite in 
their nature— it is evident that there is such 
a thing as depreciation, and that, as the cases 



46 MAXIMUM PRODUCTION 

cited made no reference to reserve for re- 
placements, diminishing values, etc., it would 
seem logical to make the assertion that these 
considerations are, after all, only side issues 
instead of principal elements of the subject 
that have so long been considered as being 
the reasons why it was necessary to figure 
depreciation. 

I get my friends to advance me enough 
money to buy land, erect buildings, install 
machinery, with the view of conducting a 
manufacturing business. I solicit business, 
get orders which I proceed to fill, charging 
labor, material, expenses against my monthly 
productions. My friends may know nothing 
of the particular business I am engaging in; 
they may know little about depreciation, di- 
minishing values, reserve for replacements, 
etc., but they do knoiv that they want the 
business to earn what was invested; and how 
can a business earn the investment if a pro- 
portionate amount is not a part of my produc- 
tion costs? If I fail to do this, I give my cus- 
tomers the benefit of money invested in my 
business which they are not entitled to, for 
when the time comes for buildings to be re- 
placed, new machinery installed in place of 
that which has worn out, etc., I find no funds 



ACCOUNTING AND MANAGEMENT 47 

on hand to do the work with, without going 
to my friends to " stake' ' me a second time. 
If I sell my plant, it would not, on account 
of its run-down condition, bring anything 
like what was put into it originally, hence 
my friends would lose their investment, or 
at least the greater part of it. If, however, 
I had added a proportionate amount of my 
friends ' investment to my cost of production, 
for which my customers would have paid, I 
would have invested in good securities funds 
with which to do my replacing ; or I could sell 
out, and return to my friends the money they 
invested plus their share of the sale of the 
plant. 

My theory of depreciation is therefore:— 
"The absorption by production of all 
capital investments, in proportion to the use 
of this investment entering into making this 
production possible, and the consequent in- 
surance of a return to the business of the 
initial expenditure. ' ' 

This can easily be seen to take care of wear 
and tear due to usage, diminished value 
which is the undistributed portion of the costs 
assessable to future production, reserve for 
replacements which is the returning to the 
business what originally was a capital outlay. 



48 MAXIMUM PKODUCTIOX 

In determining the method of figuring de- 
preciation, consideration should be given to 
the following: — 

1.— The estimated life of the unit must be 
established. 

2.— The units must be classified according 
to those which can be assessed — 

A.— Against specific production, as for 
instance a moulding machine, a lathe, or 
a boiler. 

B.— Against classes of production, as 
for instance a building for a certain class 
of production or the crane in this build- 
ing. 

C— Against total production, as for 
instance a crane serving the whole shop 
or the cupola, fan, charging appliances, 
etc. 
3.— For 2A, a rate per hour should be as- 
certained which can be charged to specific 
production when the unit is in use, or to gen- 
eral expense when idle. For 2B and 2C, a 
rate per month can be established which can 
be assessed according to the facts in the case. 
In establishing these rates we can proceed 
as follows:— Let 

M^Estimated life of the unit in months. 
H=Estimated life of the unit in hours. 



ACCOUNTING AND MANAGEMENT 49 

C— Cost of the unit. 

1= Costs of installing the unit. 

Ii^Interest on the cost of the unit. 

S=Possible salvage upon being declared 
obsolete. 

RH=Rate of depreciation per hour. 

RM=Rate of depreciation per month. 

Using these symbols, we may then formu- 
late the monthly and hourly depreciation 
rates thus: 

Eule 1. 
(C + I + IJ-S 



M 

Rule 2. 

(C + I + IJ-S 
H 



:RM 



=RH 



Regarding the recording of depreciation 
charges, a first thought would be that the 
clerical labor involved in keeping an accu- 
rate record of depreciation renders a careful 
accounting impracticable. To keep properly 
informed as to existing conditions, to have 
production costs absorb capital charges 
equitably, it is necessary to keep some track 
of the items; and while the work may seem 
unnecessary and like too much "red tape," 



50 



MAXIMUM PRODUCTION 



it will be found profitable. The card illus- 
trated on this page (Figure 4) would serve 
as an excellent means of keeping track of 
values, the reverse side being ruled to show 
the maintenance cost, date, order number, 
and the value of repairs. Eeserve accounts 
should be opened for depreciation charges, 



Department 


Account 


No. Name of Unit 


Estimated Life 


Made by 




Purchased from Date 


Order No. Rate of Depreciation 


Date Installed Original Cost 


Interest Installation Total Cost 


Betterments 


Depreciation 




o 










c 


<u 




c 


V 


<u 










<U 


3 






s 




a 


C 


1 


> 


O 


Q 


o 

E 

< 


J2 


Q 


o 
E 

< 


Si 

m 

























FIG. 4. FORM FOR R2C0RD OF DEPRECIATION. 



which should be properly classified, to which 
should be credited the amounts charged ex- 
pense for the depreciation, as shown by a 
recapitulation of the cards illustrated. In 
this manner the original values of the asset 
items are left intact, being offset by these 
credits to the reserve accounts. 



ACCOUNTING AND MANAGEMENT 51 

In closing this chapter, a few words should 
be said with further reference to a procedure 
for asset items declared obsolete before their 
estimated life, or lasting longer than antici- 
pated. As was stated, two courses are open : 
either to close the transaction or to allow it 
to work itself out. It would seem that the 
former would be the best method of pro- 
cedure. A contrary opinion by H. C. Bentley, 
C. P. A., an authority on accounting practice, 
is as follows:— 

If ten percentum per annum of machinery and 
equipment is reserved for depreciation and a ma- 
chine is replaced three years from the date purchased 
it would be theoretically correct to charge the re- 
serve account with only thirty percentum of its cost, 
as this is the amount reserve has been credited on 
account of this particular machine. This would 
necessitate charging "Surplus" with the . remaining 
seventy percentum. It is not advisable to put this 
theory into effect, however, as some machines will 
last much longer than the ten years, while others 
must be replaced in much less time than ten years. 
It thus follows that such inconsistencies adjust 
themselves in the long run, on a basis that is quite 
as equitable as if an elaborate method were operated 
with a view of securing more accurate results. 

In the illustration cited by Bentley, $7,000 
would be the loss in the year in which the 
transaction was closed, if the machine had 



52 MAXIMUM PRODUCTION 

cost $10,000. Assume for example that an- 
other machine, with an estimated life of ten 
years and costing $10,000, should last fifteen 
years. At the end of the ten years, the $10,000 
would stand as a credit to the reserve for de- 
preciation, with five years ahead of the ma- 
chine. This wonld mean that the account 
should have been credited with $666.67 
yearly or $6,667 in the ten years, leaving 
$3,333 to be absorbed by the years to come. 
We have the $10,000 in reserve, however— too 
much under the conditions. If, then, we 
open a "Values Adjustment Account " and 
credit it with this $3,333, the value on hand, 
giving this value to reserve for depreciation 
through a charge entry, we reduce the de- 
preciation credit to $6,667, the amount it 
should be. We simply transfer part of the 
reserve credit, corresponding to the gain to 
the company, from one account to another. 
Crediting assets and charging "Values Ad- 
justment Account ' ' for the $7,000 loss, leaves 
an adjustment of $3,667 which we would 
credit to this account and charge to profit 
and loss. 

To a concern desiring to get at the truth of 
things this would be the proper procedure, 
as in this way we recover, on items lasting 



ACCOUNTING AND MANAGEMENT 53 

longer than anticipated, a portion of the 
values, in depreciation reserves which can be 
used to assist in taking care of the losses due 
to units declared obsolete before the expira- 
tion of their estimated life. 



Chapter IV 

MAINTENANCE, NEW CONSTRUCTION, AND 
RECONSTRUCTION 

'1X7'E now come to a discussion of what 
* * should rightly be charged to the ele- 
ments — Maintenance, New Construction and 
Eeconstruction— a topic that has caused 
many a bitter argument, is confusing to many 
business enterprises and in addition is one 
upon which it is difficult for accountants to 
unite in agreement as to a uniform or correct 
procedure. 

Our first consideration is the fact that an 
expenditure of any kind either increases the 
value of what we may have and is therefore 
a charge to our assets, or it does not increase 
value, in which case it is a charge against 
our revenue. 

Viewed in this light we can define Main- 
tenance as — 

All expenditure for work which simply 

maintains, without increasing in any way the 

value of the plant, including all repairs and 

renewals to real estate, buildings and equip- 

54 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 55 

merit, being the expense necessary to keep a 
thing in condition, operative, and useful. 

The next element, New Construction, can 
be defined as follows : — 

All expenditure for work which increases 
(instead of maintaining) the value of the 
plant, such as betterments, extensions or ad- 
ditions to real estate, buildings and equip- 
ment. 

The element Eeconstruction can be defined 
as follows : — 

All expenditure for work which neither 
increases nor maintains the value of the 
plant, including any changing of what al- 
ready exists which is not undertaken because 
it is absolutely necessary but voluntarily for 
some resultant advantage. To include also 
expenditures of an extraordinary nature, 
which may affect maintenance. 

Maintenance would naturally be a charge 
against revenue; New Construction would be 
a charge to our assets, while Eeconstruction, 
neither maintaining nor increasing value, 
would also be a charge against revenue. It 
might be well to state in^this connection that 
expenditures for Eeconstruction or Mainte- 
nance classed as Eeconstruction, should not 
be entirely absorbed by the month in which 



56 MAXIMUM PRODUCTION 

they are made. Items that are chargeable to 
Eeconstruction are generally of an extraordi- 
nary nature, and it is hardly fair to make any 
one month absorb the entire cost. This 
should be spread over a period of months to 
be decided upon according to the facts in the 
case. 

It would appear as if the matter of correct 
charging would not be difficult, but the task 
becomes complicated in the absence of a well 
defined way of handling the various cases as 
they come up, so that the problem is to out- 
line some procedure for determining a divid- 
ing line between charges to our assets and 
charges against revenue, in which respect 
misconception has done no end of harm to in- 
dustrial undertakings, as a great many know 
—to their sorrow. 

One manager whose whole aim and pur- 
pose is to keep cost down, will oftentimes 
allow this desire to get the better of his judg- 
ment, and as a result items which should be 
charged against revenue are classified as 
assets. Another manager, desirous of getting 
at the true showing, regardless of the effect* 
will make revenue stand such items as are a 
legitimate charge against it. In other cases 
what one manager considers a charge against 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 57 

revenue, another will feel perfectly justified 
in treating as an asset. It therefore seems 
as if the deciding factor as regards questions 
affecting assets and revenue, in many in- 
stances is either personal opinion or the de- 
sire of the executive, rather than an effort to 
outline a uniform policy; consequently it is 
but natural that we should find so many dif- 
ferent methods in practice. 

Assets in the strictest acceptance of the 
term, should mean one of two things: 

1.— Money on hand or its equivalent. 

2.— That which can be converted into 
money. 

This establishes the fact that assets are of 
two kinds, quick and fixed. Cash in bank 
and accounts receivable would come under 
the first class, while real estate, buildings, 
and equipment would be classed as fixed as- 
sets. If this is a correct interpretation of 
what assets are, there is no excuse for rail- 
roading into the assets accounts, items which 
cannot pass this conversion test; for an item 
does not add a cent's worth of value to the 
plant, if the amount expended cannot be con- 
verted back into money. This test can be re- 
duced to a more practical basis in a great 
many instances by the question : i ' Can I dis- 



58 MAXIMUM PRODUCTION 

pose of it for the money I have expended ?" 
The answer to this, if the attempt to get at 
the truth is a conscientious one, will deter- 
mine how the charge is to be made. 

The question whether assets values should 
be considered from the standpoint of the 
"going concern' ' or the "forced sale" is en- 
titled to some consideration. I well remem- 
ber attending a forced sale of a plant which 
brought less than $10,000 under the hammer, 
although the assets were appraised at nearly 
$100,000. Investigation developed the fact 
that the plant was old and run down ; no pro- 
vision had ever been made for depreciation; 
the management had been of the "guess- 
work" kind and the appraisers had valued 
each item at the cost to replace it, conse- 
quently the assets were all out of proportion 
to their true value, although $10,000 was less 
than what the plant may have been worth. 

It makes a remarkable difference in the 
amount that can be realized, whether a con- 
cern does not particularly care whether it 
sells or not or whether it is forced to sell. In 
the first case it can demand, and no doubt 
secure, a much larger figure than would be 
the case if the creditors took a hand. With 
the forced sale we find conditions that can be 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 59 

classed as unnatural. The buyers pay little 
attention to correct values— they are out for 
bargains, knowing full well that the con- 
sideration of prime importance to the cred- 
itors, first, last and all the time is — the set- 
tlement. 

A doctor asks a certain fee for an opera- 
tion, a fee on a par with that asked by other 
doctors. The fact that a prospective patient 
refuses to pay this fee is no evidence that 
the services are not worth what was asked 
for them, for he will find plenty of patients, 
if he is successful, who are willing to pay the 
regular amount. If the doctor is "up against 
it, ' ' he may consent to take the case for much 
less than the regular price ; but this does not 
by any means represent the true value of 
surgical services, although as far as the doc- 
tor himself is concerned his condition forces 
his value down and that is as far as the in- 
fluence can be made to go. My . neighbor 
buys a piano for $600, has it a year but uses 
it very little. His wife dies and he decides 
to sell out everything. I want the piano, 
and as we have been firm friends, he consents 
to sell it to me for $200. That he sold it to 
me for this figure is no indication that it is 
worth only $200, for I could no doubt get 



60 MAXIMUM PRODUCTION 

nearly as much as was originally paid for it. 
Friendship and a desire for a quick sale, re- 
gardless of value, were the underlying mo- 
tives contributing to the decline in value to 
$200— a false value, as everyone can appreci- 
ate. So with the forced sale— the values are 
false and should not be considered as a guide 
in arriving at an assets value. 

If an item is useful and necessary; if it 
facilitates production or is a business getter; 
if it is something that can no doubt be used 
to advantage by a prospective buyer, it is 
something of value and can be added to our 
assets; for it is safe to assume that it would 
find a buyer at the price asked. If any doubt 
exists, however, its cost should be absorbed 
by revenue— a safe and sane procedure— 
keeping out of the assets questionable values, 
which if included tend only to mislead, often- 
times with results not at all gratifying. 

After all, the main thing to consider is that 
as long as "cost of production'' is to absorb 
everything, it is playing safe to write all 
doubtful cases into cost; and if, in addition 
to this, the attempt to have the cost absorb 
items that can be rightly considered as assets 
is an honest one, the values will not be far off. 

Definitions and a general outline as to pro- 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 61 

cedure are sometimes easy to understand, but 
when we come to deal with specific cases we 
may find that the proper handling is still 
rather difficult on account of the various ways 
of looking at the subject. I know of one con- 
cern making a standard type of machine 
which for years has been in successful com- 
petition with other makes, where the policy 
is to charge all patterns and drawings on all 
new work to the expense account in the 
month in which they are made. In another 
concern where the designs have been con- 
stantly changing, patterns and drawings 
have been charged to assets, subject to a 
ridiculously low depreciation rate, and as a 
result both accounts are far in excess of 
what they should be. Both ways cannot be 
right; in fact both may be wrong, for which 
reason it seems advisable to get down to a 
discussion of cases. 

CASE 1. MAKING NEW WOOD FLASKS. 

A. — Stock size, for general use and not re- 
placing old or discarded flasks— 

This transaction can hardly be considered 
as in any way increasing value, first because 
of the short life of wood flasks, and second 
because the usual foundry wood-flask equip- 



62 MAXIMUM PRODUCTION 

ment is about ready to be used for firewood, 
and from the standpoint of a convertible se- 
curity is worth next to nothing. Wood flasks 
are constantly wearing out, new ones being 
added to take their places. If they vary 
much as to size, is this sufficient grounds to 
class them as assets! Would it not be bet- 
ter to consider them as maintaining the value 
of the wood-flask equipment, which if en- 
tered as assets should be represented by a 
nominal figure to cover the whole equipment, 
subject to change only as the business ex- 
pands? It would seem from the above that 
the case should be classed as a Maintenance 
item. 
B. — For a special line of work — 
It follows that it is the special work that 
makes this flask-making necessary. Value 
has not been increased, because the flasks 
will no doubt be useless when the special 
work has been done. Nor has value been 
maintained according to our definition, con- 
sequently this charge should be considered 
as expense and absorbed by the special work 
to be made in them. 

C. — To replace old and worn-out flasks — 
1. — If stock size for regular use, the expen- 
diture would be a Maintenance itein as it 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 63 

does not increase value to any extent, simply 
maintains it. 

2. — If for special work, it would be a 
charge against the work the same as IB. 

CASE 2. MAKING NEW IRON FLASKS. 

A. — Standard sizes for general use and 
not replacing old or discarded flasks — 

Iron flasks under the condition outlined 
no doubt increase value. They are necessary 
and useful; they facilitate production and 
are something a prospective buyer could use 
to advantage, and as they possess a much 
greater degree of permanency than wood 
flasks, we can safely class them as a New 
Construction item. 

B. — For a special line of work — 
Eemarks at IB would apply if the flasks 
would be of little value after the special 
work was made in them. Should they be 
so designed, however, as not only to take 
care of the special work but to be useful for 
general purposes, then it would be well to 
charge part of the cost against the special 
work and the balance to New Construction. 

C. — To replace old and worn out flasks — 
Remarks at 1C would apply here. 



G4 MAXIMUM PRODUCTION 

Note. — Care must be exercised in deter- 
mining whether a new flask is a replacement, 
or for special work, or an addition to the 
existing equipment. The proposition is 
usually a confusing one, for there have been 
cases where new flasks have been made as a 
replacement but put in as new equipment, 
because the flask was new and also because 
of the fact that the ones they replaced had 
been lost sight of. If not rightly looked 
after, the proposition will soon become hope- 
lessly confused. 

CASE 3. MAKING A LOT OF WOOD FLASKS, WITH 

IKON BARS, WHICH ON ACCOUNT OF THEIR 
CONSTRUCTION WILL LAST A REASONABLE 
LENGTH OF TIME. 

The procedure outlined for 2 ABC seems 
upon consideration to take care of this case 
also, although the life of such flasks would 
be shorter than iron flasks. 

CASE 4. A NEW BELT TO REPLACE AN OLD ONE. 

As this belt was added to keep the trans- 
mission equipment in good running order, it 
would have to be considered a Maintenance 
item, according to our definition given at the 
beginning of this chapter. 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 65 

CASE 5. A NEW BELT PLACED ON A NEWLY IN- 
STALLED MACHINE. 

The new machine adds value, and being 
a security that can be converted into money, 
is an asset. The belt being a component 
part of this machine along with the counter- 
shaft would naturally be included in the cost 
of the installation and also considered an 
asset, consequently a New Construction item. 

CASE 6. CHANGING THE LOCATION OF A 

DEPARTMENT. 

A move of this kind neither adds value nor 
maintains it — as we would have just as much 
value after the change as before; conse- 
quently, the cost of the work would be 
chargeable to Keconstruction and absorbed 
by expense. 

CASE 7. CHANGING THE LOCATION OF A DEPART- 
MENT, AND ADDING A NEW DEPARTMENT. 

As consideration will show, we have a 
transaction of which part neither adds nor 
maintains value and part adds value ; hence 
it affects both Reconstruction and New Con- 
struction, the cost of the changing and the 
addition to be kept separate for correct 
charging. 



66 MAXIMUM PRODUCTION 

CASE 8. PAINTING THE BUILDINGS AND WHITE- 
WASHING THE INTERIOR. 

In this instance the work is done to main- 
tain value, but as the expense is of an ex- 
traordinary nature it would be hardly fair to 
charge the cost against the month in which 
the work is done, for which reason it should 
be classed as a Eeconstruction item and the 
cost spread over a period of months, to be 
decided upon as being just and equitable, 
Eeconstruction to be credited and Mainte- 
nance charged with the monthly portions of 
the amount so apportioned until the whole 
sum has been accounted for and dis- 
tributed. 

CASE 9. — TAKING DOWN A LINE SHAFT AND PLAC- 
ING IT IN ANOTHER POSITION. 

See Case 6. 

CASE 10. EXTENDING LINE SHAFT FOR AN EXTRA 

PULLEY AND BELT. 

Here we have another instance of adding 
something which would pass our conversion 
test, consequently we can class this as a 
New Construction item under the definition 
set forth at the beginning of the chapter. 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 67 

CASE 11. RELOCATING MACHINERY, WITH THE 

VIEW TO IMPROVING THE EQUIPMENT FACILI- 
TIES, MAKING NO CHANGES IN TRANSMISSION 
ARRANGEMENTS EXCEPTING WHERE NECES- 
SARY TO CONNECT THE DRIVES PROPERLY. 

In this case we move what is already con- 
sidered as something of value, from one 
place to another, and add what may be neces- 
sary to effect proper transmission ; but as it 
is more than likely that what was added re- 
placed worn-out parts, it is proper to treat 
this case as effecting Eeconstruction. 

Should it happen that quite a little new 
material had to be added as an addition, not 
a replacement, it being necessary to discard 
some of the equipment previously used, then 
the case should be handled by charging Ee- 
construction for the relocating and New 
Constructions for the additions, crediting 
the latter for the present value of this dis- 
carded material. 

CASE 12. RELOCATING MACHINERY, PUTTING ON 

ALL NEW BELTS. 

Here we have a transaction affecting both 
Eeconstruction and Maintenance, for as re- 
gards the relocation, we neither add nor 
maintain value, while replacing belts would 



68 MAXIMUM PRODUCTION 

be a move to maintain value. To save need- 
less accounting however, the whole cost 
should be charged against Eeconstruction 
and spread over a period of months. 

CASE 13. RELOCATING MACHINERY, INSTALLING 

MOTOR DRIVES TO REPLACE BELT DRIVES. 

In this case we can see that Eeconstruction 
is affected for the cost of relocating, but that 
we have also added something of value in 
the way of new motors, consequently for the 
latter we would charge New Construction 
and credit it with the present value of the 
belts. 

CASE 14. INSTALLING A PRODUCER-GAS PLANT 

TO REPLACE A STEAM EQUIPMENT. 

This is, of course, a replacement, but not 
made to maintain value nor in the sense that 
we relocate a department or machine. We 
eliminate something of value and add some- 
thing of value. The difference in values 
must be considered, which gives rise to the 
query regarding which of the following 
values should be used — 

1. — The difference between the present 
value of the steam equipment and the cost 
of the gas plant. 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 69 

2. — The difference between what we are 
allowed for the steam plant and the cost of 
the gas plant. 

3. — The difference between what we pay 
for the gas plant and what we sell the steam 
plant for. 

The steam plant was put in the assets, 
when new, at a certain figure. It now has a 
value, less than the original amount by what 
has been absorbed by cost of production; 
consequently the balance remains to be re- 
turned to the business. We cannot leave this 
amount in our assets because we do not have 
this value in any convertible security ; conse- 
quently we should charge New Construction 
for the cost of the gas plant — charging " Val- 
ues Adjustment Account' ' and crediting As- 
sets for the present value of the steam plant. 
What we are allowed in exchange or receive 
for selling the steam plant would be a credit 
to "Values Adjustment Account.' ' 

CASE 15. EXTENDING THE CRANE RUNWAY AND 

REPAIRING THE REGULAR RUNWAY AT THE 
SAME TIME. 

This transaction will be seen, upon consid- 
eration, to involve New Construction for the 
value of the extension, and Maintenance for 



70 MAXIMUM PRODUCTION 

the repairs on the regular runway. Value 
is increased on the one hand and maintained 
on the other. 

CASE 16. REPLACING THE EQUIPMENT OF METAL 

PINIONS WITH RAWHIDE PINIONS AND IN CER- 
TAIN PLACES SUBSTITUTING STEEL GEARS FOR 
IRON GEARS. 

As the cost of the work originally placing 
these gears and pinions in position was ab- 
sorbed by assets, the work of replacing them 
neither maintains nor increases value ; conse- 
quently it involves Reconstruction. The cost 
of the new material less the present value of 
the discarded pinions and gears is a just 
charge to New Construction. 

CASE 17. — REWIRING THE PLANT; REPAIRING 
WHAT DOES NOT NEED REPLACING; CONCEAL- 
ING THE WIRES; SUBSTITUTING TUNGSTENS 
FOR THE INCANDESCENTS AND FLAMING ARCS 
FOR THE ORDINARY ARCS IN USE, AT THE 
SAME TIME WIRING UP A NEW DEPARTMENT 
JUST CONSTRUCTED. 

This case is rather a confused proposition, 
involving New Construction, Eeconstruction 
and Maintenance, as we add value, maintain 
value and do neither. Extreme accuracy 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 71 

would be possible but impracticable. 
The procedure would seem to be: 
charge Eecoustruction with all of the cost 
of the work, less the work in the new depart- 
ment, which would be a charge to New Con- 
struction, and increase the assets by the dif- 
ference in values between the tungstens and 
flaming arcs and the lamps discarded. 

CASE 18. PUTTING IN A NEW CUPOLA SHELL TO 

REPLACE ONE WOEN OUT; ADDING TWO OK 
THREE EXTRA COURSES TO THE STACK; IN- 
CREASING THE NUMBER OP BLAST CONNEC- 
TIONS AND RELINING THE CUPOLA. 

We can outline the procedure for this case 
as follows — 

Putting in new shell. To Maintenance on 
Eelining cupolas. account of value 

Adding extra courses. being maintained. 
Increasing connections. To New Construc- 
tion on account 
of value being 
added, 
the cost of the work less the value of the new 
items to be charged to Eecoustruction on 
account of the work being of an extraordi- 
nary nature, and spread over a period of 
months. 



72 MAXIMUM PRODUCTION 

CASE 19. THROWING OUT A MOULDING MACHINE 

WHICH HAS NOT MEASURED UP TO EXPECTA- 
TIONS AND INSTALLING A BETTER TYPE. 

While adding something' of value, we are 
also losing something of value. To handle 
this transaction properly so as to produce a 
true showing, the procedure should be along 
the same lines outlined in Case 14. 

CASE 20. MAKING NEW PATTERNS AND DRAW- 
INGS. 

A. — For an improved type of a standard ma- 
chine. 

B. — To suit the wish of a customer. 

C. — To correct a fault existing in the design 
of a machine. 

D. — For a new and untried type of machine. 

E. — For maintenance of equipment. 

F. — For new equipment. 

The correct handling of the cost of pat- 
terns and drawings has always been a source 
of considerable discussion. A statement 
showing "net worth' ' which included all pat- 
terns and drawings would be open to ques- 
tion ; in fact, an executive in favor of charg- 
ing his own patterns and drawings to assets 
would be the last man to sanction the pur- 
chase of another concern without first satis- 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 73 

fying himself that he was not going to pay 
for patterns and drawings that were of little 
value to his business, which gives rise to the 
query: what patterns and drawings are of 
value to a business? 

In one sense it is doubtful if any are. New 
manufacturing processes, new tools, better 
designs, the failure of designs to be a com- 
mercial success, and numerous other reasons, 
all contribute to make patterns and drawing 
a doubtful quantity as regards their value. 
Uncertainty is another factor. What might 
be considered an asset may prove a failure, 
and on the other hand what was considered 
problematical and not regarded as an asset 
may prove to be a great success. It seems, 
therefore, as if no definite method of proce- 
dure can be outlined. If, however, the view- 
point is not so much the desire to get as 
much as possible into the assets as it is to 
make production absorb capital charges, it 
makes it unnecessary to "split hairs' ' in de- 
ciding just how to proceed. If the cost is 
absorbed at once, revenue takes care of what 
would otherwise be a capital investment— 
the safest way. If the cost is considered an 
asset and spread over a period of years, 
capital investment is returned slowly (in one 



74 MAXIMUM PRODUCTION 

case I know of, 3 per cent annually on de- 
creasing balances is considered a correct pat- 
tern and drawing depreciation) sometimes 
much more slowly than the corresponding 
discarding of patterns and drawings — a pro- 
cedure that assesses each year, after a cer- 
tain period, with an unjust cost. 

Getting back to the case outlined, a pro- 
cedure might be outlined as follows : 

20A. — As the type of machine is standard 
and the improvement made only after it has 
been demonstrated that it will make the de- 
sign more efficient, it is safe to consider this 
an asset. The estimated life of the design, 
however, should not be placed at a figure 
which is equivalent to saying that it will 
never be declared obsolete. It must be re- 
membered, as pointed out in the preceding 
chapter, that the whole aim and purpose of a 
depreciation allowance is to have production 
refund capital investment, and the more 
quickly it is returned, the better. 

20B. — This is obviously a charge against 
the contract, as it is the customer's wish 
which makes the change necessary. He may 
or may not be willing to pay for this change, 
but this does not alter the fact that value is 
not increased nor is it maintained. 



MAINTENANCE, CONSTRUCTION, RECONSTRUCTION 75 

20C. — If a fault exists in the design, it 
means that the security is not as valuable 
as it should be ; consequently to make it valu- 
able to the trade (which is only another way 
of saying that it is of value to us) we must 
expend enough to make it so — hence the item 
is a charge against revenue. 

20D. — Here we have an element of chance. 
It is possible that the type will be a success 
— it is just as likely, however, to be a failure. 
We do not know as yet whether we have any- 
thing of value or not ; consequently it is not 
playing safe to call it convertible security, if 
it is not known that such is or will be the 
case. The safest plan is therefore to make 
the current year stand the expense, one- 
twelfth per month, if the expense exceeds a 
figure decided upon, or the current month if 
the cost is a small one. 

20E. and F. — The cost of patterns and 
drawings for the new equipment would nat- 
urally be a New Construction item, while if 
for Maintenance, revenue would have to ab- 
sorb it. 



Chapter V 

SYSTEMATIC PEOCESSING, ASSEMBLY, 
AND EEECTION 

A MAN once told me that a manufacturer 
-*** who was not conducting his affairs in 
a manner to insure maximum results had 
absolutely no right to be in business ; that he 
should step down and out and give way to 
some one who would fully appreciate the 
possibilities and take every advantage of 
them — who would leave no stone unturned 
until a full measure of success was his. 

Such a statement might, on first thought, 
seem rather startling; in fact, it impressed 
me to such an extent that I asked a number 
of manufacturers how they felt toward those 
who were conducting their business in an 
unsystematic manner. One replied by say- 
ing that he had just been advised that his bid 
on a large contract had been rejected because 
of a much lower tender from some other con- 
cern; that he was in a position to know that 
the work could not be made at a profit by 
his competitor at the price he quoted. He 

76 



PROCESSING, ASSEMBLY, AND ERECTION 77 

said that he knew how much labor and mate- 
rial the work would take, and as his burden 
rate was accurate, he knew that his bid was 
actual cost plus a reasonable margin of 
profit; but that his competitor got the work 
and would lose money while he lost the work 
and an opportunity to make a profit. 

Another stated that he had spent consider- 
able time and money in an effort to organize 
and systematize his business so as to enable 
him to secure maximum results ; that he knew 
where his losses ceased and his profits be- 
gan, as well as just what he would have to 
accomplish in the way of a production; and 
that he was willing to give to any of his 
competitors the benefit of this expenditure 
of time and money, if it would result in a 
more intelligent competition. While he real- 
ized that his competitor who conducts his 
business in a careless manner is destined 
either to be forced to put his house in order 
or go out of business, the fact remained that 
his business as well as the business of many 
others was far from being benefited by a 
competition that could lay absolutely no 
claim to intelligence. 

It is not the purpose of this chapter to go 
into a detailed discussion regarding the 



78 MAXIMUM PRODUCTION" 

rights and privileges of a manufacturer, and 
while it is a fact that he may conduct his 
business in any old way that he may elect, 
there being no law against his so doing, there 
should be some means to prevent him from 
involving others in the harm that he is bring- 
ing upon himself. Should a bank get into 
financial difficulties, measures are promptly 
taken, not only to look after its affairs, but 
to prevent other banks from becoming in- 
volved; but what protection has a manufac- 
turer from those whose " penny- wise, pound- 
foolish ,, policies cannot fail to have a detri- 
mental effect upon the whole business struc- 
ture? 

The point I desire to emphasize is simply 
this — do not stand in your own wag. Con- 
duct your business in the best and most care- 
ful manner — do not let a dollar creep into 
the expense account that should be to your 
credit in the bank — make your competition 
what it should be ; and while it has been said : 
"a man always believes more readily that 
which he prefers to believe," a manufac- 
turer, in the majority of instances, will be 
more successful if he will simply ask him- 
self the question: "How do I know that I 
am not getting maximum results V In his 



PROCESSING, ASSEMBLY, AND ERECTION 79 

attempt to answer this self-imposed ques- 
tion, he will invariably begin to feel that 
after all a man is in no position to determine 
the merits or criticize the value of something 
about which he knows nothing, and will put 
aside partiality for his own and prejudice 
against other methods in order to be in a 
position to judge intelligently. 

Business is conducted for profit and must 
of necessity be conducted at a profit in order 
to make it impossible for the "receiver" to 
take over the management of affairs. The 
margin of profit can be so small as to be 
easily wiped out through lax and careless 
methods, while it can never be so great as to 
make it impossible for the best of manage- 
ment to increase it to a slight degree. The 
margin of profit, however, depends upon the 
manufacturer himself, although he cannot ac- 
complish what he desires (and all desire a 
maximum profit) without depending upon 
something that will enable him to obtain the 
greatest degree of efficiency from his work- 
men and machinery. This something we will 
call * ' scientific organization, ' ' for it will be 
found in the efficient industrial plants, where 
a maximum production is obtained at a mini- 
mum cost, that the details regarding organ- 



80 MAXIMUM PRODUCTION 

ization have received careful consideration 
from able and high-priced men, and that in- 
telligent supervision occupies a most impor- 
tant place as a result producer. 

In analyzing the seemingly complex indus- 
trial body, the purpose of which is an output, 
the measure of success its per cent of profit 
on cost, we find production dependent upon 
two fundamentals: 

_. , ,. (Labor 
Production J ^^ 

Looking still further, we find them subdi- 
vided as follows: 

Eaw 



! 



Material 

h mished. 

, Productive 

| Non-Productive. 

We can therefore define our production as 
being the outcome of a process of evolution 
of materials from their raw or unfinished 
state to finished units, through the instru- 
mentality of labor which devotes its entire 
time to the producing — productive labor — 
assisted by labor which, while producing 
nothing, is necessary in order that the prod- 
uct may be processed and marketed most eco- 
nomically — non-productive labor. 



PROCESSING, ASSEMBLY, AND ERECTION 81 

We find these units, whether they be re- 
frigeration, saw-mill, electrical, planing- 
mill, power, starch-making, hoisting, mining 
or other kind of machines, divided as fol- 
lows. 

[Standard i standard and s P ecial Parts [various 

Units ( All Standard Parts ) Operations 

Special (Standard and Special Parts ) Various 

Units ( All Special Parts ) Operations 

Before we can bridge between the opera- 
tion and the completed nnit, the largest pro- 
portion of all work must go through two 
stages of development : 

Machining or processing. 

Assembly or erection. 

In a small establishment, this machining 
may be done in one department, or, depend- 
ing upon the size of the business, we may 
have a department for the lathes, one for 
the planers, the milling, slotting, etc., may 
be done by another, the drills may be in one 
place by themselves, while the laying out of 
work from drawings may be done by one de- 
partment, or each department may look after 
its own laying out. 

We have the complete unit which is the 
outcome of an assembling process, a number 



82 MAXIMUM PRODUCTION 

of parts being required which have to pass 
through certain processes of machining, or 
operations, before being in the proper state 
for assembly with one another. It is there- 
fore evident that the more the parts tliat go 
through the various operations of machining 
in a given time, the greater the number of 
completed parts ready for final assembly. 
Now if we can picture a shop containing two 
workmen — one to do the machining and an- 
other to do the assembling — with a man in 
charge, and follow two parts, say a forging 
and a casting, from the forge and stock room 
to the car, we shall have an example of a 
supervision of the highest order ; for it would 
be an easy matter for the man in charge to 
follow the parts, from their receipt as raw 
material, through the stock room and black- 
smith shop, the layout floor, the drills, lathes, 
etc., thence to the assembly floor, through 
the processes of erection, to the car, keeping 
in touch with the situation until the parts 
reached their destination, with the result that 
they could be produced at a minimum cost as 
supervision would force them through in the 
shortest possible time. If we could transfer 
this same degree of efficiency to a large 
manufacturing establishment, making it a 



PROCESSING, ASSEMBLY, AND ERECTION 83 

part of a carefully worked out organization, 
it would not take long before a maximum 
production would be the result. 

If we know something we can apply this 
knowledge, as the architect, through his 
knowledge of building materials, strengths, 
etc., can design a sky-scraper. If therefore 
we know all that it is possible to know con- 
cerning the various details connected with a 
manufacturing enterprise, we are in a posi- 
tion to apply this knowledge successfully and 
with the expectation of obtaining maximum 
results, providing the application is a dili- 
gent one ; for the success of any undertaking 
is in proportion to the care with which the 
many details are looked after. First knowl- 
edge, then diligence — organization, then su- 
pervision. 

In the handling of any work from raw ma- 
terial to finished product, the most impor- 
tant things we must know are : 

The various parts that go to make up a 
completed unit. 

The operations required to make a part 
complete. 

The time each operator should take. 

The tools, jigs, etc., necessary to complete 
an operation. 



84 



MAXIMUM PRODUCTION 



The condition of the stock of materials 
necessary to complete a unit. 

When the unit is wanted. 

Where the parts are during process of 
construction. 

How the work as a whole is progressing. 



LIST OF MATERIAL 


DESCRIPTION 




Ons D. D. Machine. 


pnn Jenkins Manufacturing Company 




X Style 


ADDRESS Buffalo. N. Y. 


MADE UP BY F L Smith DATE Jany 1 1907 


WANTED April 1st. 


PRODUCTION ORDER * 420 SHEET * 1 


SPECIAL INFORMATION 




Regular testing Instructions apply to this order 


V 


* 

PCS 


PIECE 

NUMBER 


name 


DRAWING 
Nl'MHEB 


MAT'L 


PRO.ORDIR 
NUMBER 




2 


X420 


Arm Brackets 




2160 


C.I 


420. 1 




5 


X428 


Long Arms 




2140 


Forge 


420.2 




5 


X429 


Short Arms 








420. 3 




1 


B50 


Bed 




3100 


C.I. 


420.4 




2 


A2I4 


Rods 




2000 


Steel 


420. S 



The Eng.Magazin* 

fig. 5. list of material. (See Page 87.) 



PROCESSING, ASSEMBLY, AND ERECTION 85 

In addition to possessing a knowledge con- 
cerning the above points, we must have a 
means of notifying : 

Works Manager, of orders for completed 
units. 

Foremen, of orders for production and as- 
sembly of parts. 

Workmen, of the work to be done. 

Stock Clerk, of material to be delivered 
and to whom. 

Office, where parts in course of construc- 
tion are. 

Works Manager, regarding condition of 

any order. 

Foremen, regarding parts needing special 
or immediate attention. 

Further, we must inform : 

Shipping Clerk, regarding promise of ship- 
ments. 

Office, when stock needs replenishment or 
to replace spoiled or rejected work. 

Foreman, regarding the time spent on 
work. 

As stated in the previous chapter, any in- 
troduction of methods must be made only af- 
ter a careful study of the conditions. A man- 
ufacturer can no more expect to get re- 
sults from a system devised to meet con- 



86 



MAXIMUM PRODUCTION" 



tv{e. 



ditions other than 
his own, than a doc- 
tor can cure con- 
sumption by prescrib- 
ing cough medicine or 
a nerve tonic. A num- 
ber of plants manu- 
facturing the same 
article will have con- 
ditions existing in 
each that are differ- 
ent from those in all 
of the others ; and 
while principles may 
be the same in every 
instance, application 
must take into con- 
sideration the pecu- 
liarities and needs of 
each case. 

Units are composed of parts — parts take 
operations — operations as a rule require 
small tools, jigs, etc., and in order to facili- 
tate processing from raw materials to fin- 
ished product, detailed information concern- 
ing them is important as well as complete 
knowledge concerning condition of materials. 



(iJUag^ti 



FIG. 6. COST DATA SLIP. 



PROCESSING, ASSEMBLY, AND ERECTION 87 

Begarding the various parts that go to 
make a completed unit, it must be known how 
many of each are wanted, their names, the 
number of the pattern and the drawing num- 
ber, the kind of material, and the order num- 
ber of each part. For this purpose a "list of 
material, ' ' patterned after Figure 5 could be 
used to advantage; it should contain every 
item that enters into the construction of the 
completed unit, for the information of not 
only the office but the shops, and for future 
reference in case of repairs, etc. A check 
column has been provided for, the purpose 
of which will be explained later. To the right 
of the list and slightly separated from it is 
a form with five columns to be used for re- 
cording cost data pertaining to the various 
parts. The lists for the drawing room and 
the various shop departments are printed as 
shown in Figure 5, while the list to be used 
by the office and cost departments has the 
added slip shown in Figure 6 with the extra 
columns joined to the main sheet so as to 
make a complete list. In inserting the sheets 
into the typewriter — and they should be type- 
written — the one for the office can be placed 
on the bottom with the extra part turned 
under. If the typewriter has a wide car- 



88 



MAXIMUM PRODUCTION 



riage, however, the sheet or slip for the cost 
department may be inserted as shown. For 
standard machines, it would be well to have 
the lists printed so as to save the work of 
typewriting. 



PART CARD 


Name of part Bracket Number of part x U3 


Number of Drawing SUM Material C.I. 


For what used UM Machines Weight 930 


Tools and jigs 3 and *i0 


OPERATIONS 


J 


Layout 




S 


Drill 






s 


PUxnc 






u 


Bore 




























The Eng Magazine 



FIG. 7. DETAILED RECORD OF PARTS AND OPERATIONS. 



It is also necessary to have a detailed rec- 
ord of the parts and operations, Figure 7, 
which should show the name of the part, its 
pattern number, its drawing number, mate- 
rial, for what machine or machines used, its 
weight, the dies and jigs it takes, and the 
number and name of the operations, as well 
as the time each operation should take. A 
complete record of parts is of value to any 



PROCESSING, ASSEMBLY, AND ERECTION 89 

manufacturer in addition to his pattern rec- 
ord, for while the pattern record cards would 
be filed by consecutive numbers, the part 
cards would be filed numerically by machines, 
thus giving a cross reference. 

In order to facilitate the work in the shops, 
a means should be provided for recording the 
tools, jigs, etc., necessary for part operations. 
A place should be provided for these rigs and 
they should be kept in their places when not 
in use in the shops. Many an hour has been 
lost by a man looking. for a certain jig with 
which to complete an order or operation ; but 
by properly classifying them as shown in 
Figure 8, it will be known what they are for 



TOOLS AND JIGS 


Number 40 


Name and description 




Clamping Rig 


When made ^/05 


For part x A3 




•Operation Bore 


For job %8U0 




Material C.I. 


Weight 25* 




Where stored Shelf* SO 


In use Yea 




Remarks 




The Eng. Magazine 



FIG. 8. CLASSIFICATION OF TOOLS AND JIGS. 

and where they can be found, this knowledge 
going a long way toward saving considerable 
time in the course of a year. 

After we have arranged for the proper 



90 MAXIMUM PRODUCTION 

handling and classification of details relat- 
ing to units, parts, operations and tools, the 
next consideration of importance is a knowl- 
edge concerning the materials on hand. It 
seems strange that this department of a 
business should be as carelessly handled as 
it so often is, for it is a fact that will admit 
of no argument that there are many manu- 
facturers who, while they may have machine 
departments systematized to a high degree, 
have stock departments that are most sloven- 
ly managed. It will be found in such cases 
that stocks are arranged in anything but a 
logical order, a dozen pieces of the same 
part likely to be found in as many places — 
no one can tell whether a part is in stock or 
not without searching for it — the quantity of 
a certain kind of stock on hand can only be 
ascertained by counting each time — guess 
work is the only means of determining the 
amount used in a given time — work is often 
held up because it was thought that the neces- 
sary stock was on hand — anyone can take 
what is wanted without an order or even 
recording the withdrawal — there is no check 
against tying money up in excess stock, and 
absolutely no protection against theft, waste, 
or mislaying of materials. 



PROCESSING, ASSEMBLY, AND ERECTION 91 

It would be hard, in fact, an impossible 
task, to explain why a manufacturer will use 
the care he does in looking after his cash on 
hand and in bank, only to show an almost 
utter lack of concern when money is trans- 
ferred into material. He would almost have 
heart failure if anyone would ask him for 
a dollar with the stipulation that no entry was 
to be made on the books, and he would not 
consider such a thing for a moment. On the 
other hand, so careful is he, that if only a 
quarter's worth of stamps are purchased, he 
sees to it that cash is credited and expense 
charged for the outlay. If he buys $100 
worth of material, merchandise or whatever 
the account may be named is is charged, and 
the person from whom the material was pur- 
chased is credited; but how this material is 
used, when it is used, or where, receives but 
little of his consideration. If a dollar in 
the office is guarded with the care that it is, a 
piece of brass in the stock room, costing and 
worth a dollar, should receive the same de- 
gree of attention; and a workman should 
have no more right to take this piece of brass 
from stock without accounting for it than he 
would have the right to walk into the office 
and remove a dollar from the cash drawer. 



If 

*S 
Bg 

ii 

« — ■— 

o 

1 

g 

i 

< 

a. 

I ** 

b 

o 
9 £ 

« a 

a a 
PS « 

a 

a 

e 

1 

! ° 


"1 H J M. _J_ -S 


8 J -| 


\ > • § - * 


i a si a 
! 1 S| 


"11 


i 


1 aS?\ 
v a gg 

a si 


ill 

8 


1 5 


1 §1 

3 


3 Si 

w li 


§3 «» -» •» «5 "i «* 

1 « 


* ^ if 

gig 

a * 2 


I 81 11 III 1 

s 8 


1 ££^£ ^ 


| 8 8 


E g r 


l "IB I 

S IN ^ 


i Tg -5 



92 



PROCESSING, ASSEMBLY, AND ERECTION 93 

Material is a heavy item to the majority 
of manufacturers, and it is of the utmost im- 
portance that no more material be carried 
than the requirements of the business call 
for ; it is an easy matter to lose the earning 
power of considerable money by placing it in 
stock that is not needed. It should be the 
duty of a competent person, familiar with 
the details of the business, to establish a 
maximum and minimum allowance covering 
every kind of material used, for the guidance 
not only of the purchasing department but 
of the shops as well. This will keep the ma- 
terials within proper limits, which will mean 
a considerable saving to any manufacturer. 
If in conjunction with this we know when 
stock is disbursed and the purpose for which 
it is used, we can, if we know what is pur- 
chased, easily determine balances on hand, 
which can be checked against the allowances. 

Materials should not be given out under 
any circumstances except by the authority of 
a written order; and if the proper persons 
are held responsible, it will be found that the 
stock department will count for something 
in the accomplishment of maximum results, 
for it will be known what is in stock and the 
quantity; purchases can be made to advan- 



94 MAXIMUM PRODUCTION" 

tage; overstocking will be prevented; it will 
be known which lines are moving in a satis- 
factory way and which are not; responsi- 
bility will be fixed; workmen will find it a 
hard matter to remove material without au- 
thority to do so; mislaid and wasted ma- 
terials can be traced to those responsible — 
and, in fact, all the important facts concern- 
ing materials will be known. Figure 9 is 
shown as affording a means for recording all 
data concerning materials in stock, the en- 
tries fully explaining the method. 

Knowledge is power. The most success- 
ful surgeon is he who has made the most 
careful study of the human body — its bones, 
muscles, nerves — and the most successful 
manufacturer is he who has made the most 
careful study of the industrial body — its 
basic elements, its anatomy, the analysis of 
its forces, the proper handling of its de- 
tail. It is naturally this kind of a manufac- 
turer who realizes his ambition — maximum 
production. 



Chapter VI 

EFFICIENCY IN THE USE OF MATERIALS 
AND TIME 

T TOW much Ume are you paying for which 
-■- -*■ is producing you nothing? Time is an 
important element in production, and it 
naturally follows that any lost or wasted 
time means a certain decrease in the amount 
of output. The following illustration will 
serve to show what lost time may mean to a 
manufacturer. If we assume that 200 pro- 
ducers lose or waste only 5 minutes each hour, 
we have 166.6 lost hours at the end of a 10- 
hour day, which in 300 days to the year would 
amount to 49,980 hours. Figuring each hour 
on the basis of 20 cents would show that lost 
times, in labor alone, would amount to 
$9,996, not counting the fact that consider- 
able money is lost in the diminished output, 
which would not be the case could these 
49,980 hours have been utilized to advantage. 
Consider the number of machines that 
could be built in this lost time alone ! 

95 



96 MAXIMUM PRODUCTION 

Doubtless every reader of this chapter can 
call to mind a plant where the production 
could be materially increased if wasted time 
could be used to advantage — where men have 
to wait around after finishing one job before 
receiving another — where the stock clerk is 
obliged to spend considerable time in looking 
over his stock before knowing whether a 
certain part is in stock or not — where ma- 
chines are often idle until work can be found 
for them — where the assemblers are kept 
waiting for parts being machined before they 
are able to complete a unit — where it is often 
necessary for the shipping clerk to be on the 
jump a good share of the time to find a part 
here and a piece there before shipment of a 
machine can be made — where it is necessary 
for someone to be constantly interviewing 
various persons in an endeavor to find the 
status of an order — where more than a rea- 
sonable amount of time is consumed by men 
in taking work out of their machines, in 
order to finish a rush or forgotten order, 
then putting back the work they had taken 
out on the start — where machines are about 
ready to ship only to find that some part has 
been neglected or forgotten — where it is nec- 
essary to spend considerable time running to 



EFFICIENT USE OF MATERIALS AND TIME 97 

the office and drawing room for certain in- 
formation before a part can be machined or a 
nnit assembled — where work is made without 
regard to any predetermined standard. Add 
to these the harmful effects of friction be- 
tween those in authority, the turmoil, con- 
fusion, etc., and we have a condition of af- 
fairs for which there is no excuse and which 
is responsible, to a large degree, for lack 
of maximum results. Efficiency in produc- 
tion can be brought about only after we 
have either eliminated these conditions alto- 
gether or reduced the wasted time to a mini- 
mum. I will admit that it is impossible to 
have everything go right all of the time, but 
everything can be so handled as to make 
things go right most of the time. 

The second chapter dwelt at some length 
on the necessity for a carefully worked out 
organization that the various forces might 
be harmoniously united; the fifth briefly 
analyzed the industrial body, providing a 
means for taking care of the information nec- 
essary to facilitate production. In this we 
will go a step further and outline such meth- 
ods as have for their ultimate purpose the 
handling of the greatest amount of work in 
the shortest space of time consistent with 



98 MAXIMUM PRODUCTION 

good workmanship. In order to do so, we 
will assume that a business has been organ- 
ized to manufacture certain machines, all 
raw materials to be purchased outside, labor 
being paid by the day, the shop manufactur- 
ing departments being : — 



Assembly Department. 
Lathe and Planer Department. 
Milling Department. 
Drilling Department. 
Forging Department. 



Machining 
"Department. 



The connecting link between the factory or 
engineering branch of the business and those 
who consume its output is the office or com- 
mercial branch; much therefore depends 
upon how it is managed, and too much im- 
portance cannot be attached to the necessity 
of having some definite understanding, on 
the start, as regards the way details shall be 
handled ; otherwise costly blunders are bound 
to occur. To illustrate. If orders are given 
by more than one person, or if they can be 
given by more than one department, it is 
only natural to expect that some orders will 
be entered twice, or some not at all, each per- 
son or department thinking that the matter 



EFFICIENT USE OF MATERIALS AND TIME 99 

has been looked after by the other. Delegate 
certain lines of work to those most compe- 
tent, make the supervision such as will take 
care of the detail properly, and it will be 
found that there will be less confusion and 
mistakes. 









1 2 3 4 6 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 26 28 2? 28 g3G 31 




OFFICE 


COPY 


Sold To William Jenkins and Company 

Address Utica, New York 

Destination 

Ship Via Fast freight 


Buffalo, N. Y.. June 23 1907. 
Date Sold June 21 1907 
Sold By Johnson 
Our Order* 3445 
Their Order* A 25589 


One cylinder head .. 


X 442 


3441 


One cylinder 


B 20 


2811 


One piston 


X 440 . 


344J 




This is a rush order. 



TheBtgJ&gastn* 
FIG. 10. INITIAL RECORD OF ORDER. MADE IN QUADRUPLICATE. 

All orders and letters pertaining to orders 
should therefore be sent to the order depart- 
ment before anything else is done with them. 
This is our starting point ; and that the office 
may have a record of each order, that the 
works manager may know what the shop is 
expected to build, that the shipping and 



100 MAXIMUM PRODUCTION 

stock departments may also have this infor- 
mation, and that the customer may be ad- 
vised that the order has been received and 
entered, four copies of the order should be 
made, Figure 10 being the office record, the 
one sent to the customer bearing the regula- 
tion acknowledgment advice and the possible 
date of shipment. 

The drawing room, having been made re- 
sponsible for the accuracy of all orders en- 
tered, should state what is necessary to fur- 
nish, giving the commercial as well as the 
shop classifications. In order to do this, they 
naturally need the original order to know 
what the customer really ordered; but the 
order department, in turn, must have some 
means of knowing where the order is before 
it is entered and finally filed away. The 
order department therefore takes the four 
copies above mentioned, fills in the headings 
only, and sends the office copy, with the origi- 
nal order from the customer, to the drawing 
room, leaving the three remaining copies of 
the order on the desk of the chief order clerk, 
which will show, at all times, the orders re- 
ceived but not as yet entered. The drawing 
room takes the order, looks up the necessary 
information, makes a "list of material/ ' as 



EFFICIENT USE OF MATERIALS AND TIME 101 

described in the fifth chapter, if the order 
calls for a number of parts or if for a ma- 
chine, but if the parts necessary be few, the 
information is simply recorded on the origi- 
nal order and returned with the office copy to 
the order department. The four copies of 
the order are then taken, the information 
filled in the body of the order, the possible 
date of shipment ascertained (the clip show- 
ing the date is indicated on Figure 10) th£ 
acknowledgment is mailed to the customer, 
the works manager's and shipping clerk's 
copies are sent to the proper persons, while 
the office copy is filed alphabetically in the 
order department,, in a place which we can 
call the "live-order" file. In connection it 
might be said that the possible date of ship- 
ment should not be decided upon until after 
the matter has received the attention of 
those competent to know regarding the time 
the materials can be shipped. This is of the 
utmost importance, and the proper handling 
of shipments will be the subject of the next 
chapter. 

As the orders are being made, a number of 
copies of the "list of material" should be 
typewritten— one for the works manager, one 
for the assembly department, one for the 



102 MAXIMUM PRODUCTION 

foreman in charge of the machining depart- 
ment, one for the benefit of the stock and 
shipping clerks, one for the order depart- 
ment — to be used by the cost department in 
entering cost data during process of con- 
struction and finally filed away by this de- 
partment — the original from which the copies 
were made being filed in the drawing room as 
their record. 

So far we have given notification regard- 
ing work to be made as well as the necessary 
information to complete the work, but no di- 
rect authority has been given to process or 
assemble, which cannot be done until it is 
known in what condition the stock of mate- 
rials is in. What must be known is : 

1 — What is in stock finished ready for as- 
sembly 

2 — What is in stock in the rough. 

3 — What must be ordered which when re- 
ceived will be ready for assembly. 

4 — What must be ordered which when re- 
ceived will have to be processed. 

The stock clerk therefore takes the office 
list which accompanies his list, checks 
through his stock, and in the check columns 
uses the following symbols to designate the 
condition the order is in: 



EFFICIENT USE OF MATERIALS AND TIME 103 

w- Covering parts under classification 1. 
v - Covering parts under classification 2. 
©- Covering parts under classification 3. 
©~ Covering parts under classification 4. 



6 6 

PURCHASE REQUISITOIN 


PURCHASE ORD. 1 PEPAKTMENT 1 REQUISITION 1 DATE 

no.J>/6(7 1 Jx-c^^^e. |no. a&4 ) G,-/o-7 


NO. 


DESCRIPTION 


5 

i&tr 


IS <>i 

& MO 

1 


PUR ^S- S04. S.O.Nu^nber 


O^mA^^Jau Co lii*v^4nJi~~ 


Shipto {^ < (/ 


Address 


How to Ship^. When Wanted Qj ^^ 


Sigmedby <P^Qg) Approved by s&fC£ 



fig. 11. requisition FOE matekial, (See page 105.) 



10-4 



MAXIMUM PKODUCTIOX 













IFINISHED 




IROUGH 


PRODUCTION ORDER No. 
1 160.57 


PIECE No. 

X 450 


DRAW ING No 
3345 


Material 

Steel 


TO BE COMPLETED 


DATE OF ORDER. 

5-10-7 


FOR ASSEMBLY ORDER No 

1 1 60 Abbott 


COMPLETED 

6-/6-6 


QUANTITY 


DESCRIPTION 


50 


Guide Heads 


NOTE. Execute this order, returning same to factory office upon completion of the work. 
Charee all labor and material to the above Production Order Number. 

Whpn this Production Order covers the assembly of a machine, cbartre " labor" only to the 
Production Order Number. /o >. 

... . . SAaAx. foreman 



The Eng., tfoyorin* 



FIG. 12. PRODUCTION ORDER J FACE. 



Assembl 


y' 


Boring 


Turning 


Forging 


Milling 


Planmg 


Drilling 


Di» Ma " 


Hr.. 


Amt 


Urn 


No. 


■». 


l« 


Dm 


Mu 

No 


On. 


Amt. 


DM. 


- 


flr. 




an. 


Mai 


Hi, 


Amt 


Dm 


*o 


Bra 


Amt. 


Dm 


No. 


a™ 


uu 
































































































































































































































































































































































































































































Threading 


Grinding 


Babbitting 


Laying Out 


Cutting Off 












Pat, 


Mu 

No. 


Hra. 


Amt 




Mid 
No. 


to. 


A „ 


DM. 


Hu 

Ho. 


Hra. 


imt 


Date 


Mac 

No. 


B» 






Man 
No. 


Br! 




Date 


Man 

No. 


Bit. 


IM 


J ate 


Man 
No. 


fln 


Ant 



























































































































































































































































































































































































































































































































The Bng.Magaxtnt 



FIG. 12. PRODUCTION ORDER! BACK. 



The office list is then returned to the order 
department along with requisitions for mate- 



EFFICIENT USE OF MATERIALS AND TIME 105 

rial needed, Figure 11, and here the informa- 
tion concerning the condition of the stock 
is transferred to the list for the assembly de- 
partment, the requisitions being turned over 
to the purchasing department where the nec- 
essary material is ordered. 

The order department then takes Figure 
12 and makes an order in duplicate for the 
assembly department to cover the assembly 
work, sending the original to the foreman, 
duplicates being filed in the office, after 
which orders are made for all parts marked 
as in stock in the rough, or as needing to be 
processed upon receipt, sending the originals 
of the former class to the foreman of the 
machining department, the duplicates being 
filed in the office; on the reverse side are 
posted the cost data secured from the daily 
reports turned in by the workmen, these dup- 
licates being filed either by consecutive num- 
bers of orders or by part symbols as best 
suits the conditions, for we have the "list of 
material" showing the order number and the 
name of the customer or the purpose for 
which the work is being done, and we have 
the official notification, Figure 10, which is 
filed alphabetically, so that any reference or 
cross reference is facilitated. The original 



106 MAXIMUM PRODUCTION 

and duplicate orders covering the material 
which must be ordered and processed upon 
receipt are held in the order department, in 
a place by themselves, pending the receipt of 
the materials, so that the machining depart- 
ment receives orders to process only such 



WORKMAN'S ORDER TICKET. 



PRODUCTION ORDER NO 
SG0.30I 



PIECE NO. 



DRAWING NO. 
3-3 V<J 



MATERIAL 

C/. 



DATE OF ORDER 



FOR ASSEMBLY ORDER NO. 
SbO 



IU-^0- b I J bU 

MATERIAL TO GO TojJ£S£} NO -^ ?-'— "O^Aj>___Ji.oUlLL-JlO 



JOO /^UcAtJ- &u& 



__. 



WHEN MACHINE WORK IS FINISHED. DELIVER TO. 



vS&fc flso™^ 



The EngMauatlat 

FIG. 13. woekman's order ticket, made in tag form 

FOR ATTACHMENT TO WORK. 

parts as are in stock. This file we will call 
the " reserve-order' ' file. Figure 13 is made 
out at the same time as Figure 12, and being 
sent to the stock clerk for attaching to the 
parts when they are issued will show the 
workmen what is wanted; in no case should 
these tags be removed until the work is safely 
on the assembly floor, after processing. 
As yet, however, no material has moved, 



EFFICIENT USE OF MATERIALS AND TIME 107 

although we have provided for handling it 
as fast as it may be issued. In the first 
place, the assembly department knows from 
the list what parts are necessary to complete 
the order ; it is also known from the check- 
ing what parts are available as finished stock 
for immediate assembly and what parts must 
be machined before they can be assembled. 
The assembly foreman knows, if he is fa- 
miliar with the product, in order that assem- 
bly may be facilitated: 

The finished parts needed first. 
The rough parts that need machining first. 
In order to start the work, and that his 
department may operate to the best of ad- 
vantage, he fills out the form shown in 
Figure 14, for the important finished parts 
he needs in order to begin the assembly, mak- 
ing other lists as fast as he needs other fin- 
ished materials, these lists being sent to the 
stock room. To get the parts needing ma- 
chining, he uses the form shown in Figure 15, 
sending to the machining department the 
slips covering those parts he is most in need 
of, the balance being sent to the stock room. 
It is therefore evident that the stock and ma- 
chining departments know what the assembly 
department is most in need of at all times and 



108 



MAXIMUM PRODUCTION 



FINISHED PARTS 



. floor .for Assembly Order # the following finished 



parts which are needed by my department at once. 



Piece Drawing Mat'l 




Date 



Stock Clerk 



The Eng.Mayazin* 

FIG. 14. ASSEMBLY DEPARTMENT'S ORDER FOR FINISHED 
PARTS. 



can be governed accordingly, and while the 
stock clerk is delivering the finished parts 
called for, the machining department is mak- 
ing out requisitions for the rough parts, 
using Form 12 as the authority for so doing, 
taking into consideration the requirements 
of the assembly department as evidenced by 



EFFICIENT USE OF MATERIALS AND TIME 109 

their requisitions for finished parts. The 
stock clerk also sees to it that the requisi- 
tions from the machining department marked 
with the cross in the circle, which cover the 
parts wanted first by the assembly depart- 
ment, are promptly attended to. 



MATERIAL CARD. 



PRODUCTION ORDER NO 
125.^3 



PIECE NO. 
X 4320 



DRAWING NO. 
2640 



MATERIAL 
Steel 



DATE OF ORDER 
5-30-6 



FOR ASSEMBLY ORDER NO 
125- McKlnney 



DELIVER MATERIAL TO 



WORKMAN/ 



30 



10 Armbrackets- to be finished standard. 






When properly dated and signed by Foreman, this card becomes a Requisition for Material. 
It becomes a Material "Delivered" card when dated and signed by the Stockkeeper, who, 
after signing will place weight on back and return it to office. 



fUKBB 



The Ena.Maaazine 

FIG. 15. MACHINING DEPARTMENT'S ORDER FOR PARTS 
SPECIALLY NEEDED. 



After the stock clerk has delivered the 
parts wanted first by the machining and as- 
sembly departments — after the machining 
department has begun work on the parts the 
assembly department is most in need of — the 
balance of the orders can be worked in as 
convenient; at any rate, we have prevented, 



110 MAXIMUM PRODUCTION 

by some such method, giving to the assembly 
and machining departments, on the start, ma- 
terials which are not necessary until toward 
the end of the work while material that is 
urgently needed is not sent in or processed 
until the assembly department finds that it 
cannot go any further until the parts are in 
hand that should and could have been ready 
on the start. As fast as the stock clerk de- 
livers material to the assembly department, 
requisitioned by Forms 14 and 15, and to the 
machining department by Form 15, he sends 
the slips to the order department. This is 
also done by the machining department when 
material covered by requisitions from the 
assembly department is delivered to the as- 
sembly floor. 

. If the assembly department could use the 
output of the machining department as fast 
as parts are finished by it, the proper course 
would be to send all work to the former de- 
partment; but this cannot be done in the 
majority of cases for the reason that the 
assembly floor would soon be so littered up 
as to make it almost impossible for the work- 
men to turn around, and as we have a place 
for the storage of parts (the stock room) the 
most logical plan is for the machining de- 



EFFICIENT USE OF MATERIALS AND TIME 111 

partment to send all completed work to the 
stock room with the exception of the few 
parts that are of importance in the eyes of 
the assembly department. If we made it a 
rule to send every part to the stock room, we 
would perhaps be treated to the spectacle of 
seeing a trucker take a piece of finished work 
to the proper location in the stock room, 
unload it, be informed that the assembly de- 
partment wanted it immediately, load it, and 
take the part to the assembly floor — consider- 
able unnecessary work. The better and more 
efficient way is as above outlined, for the 
order department will know from the signa- 
tures to Form 15 whether the part that went 
to the assembly department came from the 
stock clerk or the machining department; 
but before this latter department can deliver 
a finished part it must know where to deliver 
it, and no trucker must take a part unless 
the ticket attached shows where it is to be 
taken. The rule is simply this : all parts go 
to the stock room except those covered by the 
requisitions from the assembly department, 
so that it is an easy matter for someone dele- 
gated to look after this particular part of 
the work to check assembly department 
requisitions against the work, marking at the 



112 MAXIMUM PRODUCTION 

bottom of the workmen's ticket where the 
parts are finally to go. 

It is the duty of the order department each 
day to check over the receiving clerk's list of 
receipts, so that if any material has been re- 
ceived against which there are orders in the 
' ' reserve-order ' ' file, they can be released and 
the machinery started so as to get the parts 
through the machining department and to 
the stock room or assembly floor. The stock 
clerk has the requisitions from the assembly 
department covering parts which, while not 
needing processing, were not in stock, so that 
as fast as material arrives, it will be issued 
by him without delay. 

The most important consideration now is : 
where are all the parts after an order has 
been started and under tvay, and what shape 
is an order in at any one time? Any manu- 
facturer who is in a position to answer this 
question intelligently is on the road to get- 
ting everything out of his business that is 
possible. Reference to Form 15 will show 
that after signing by the foreman and pre- 
vious to delivery, it is a " requisition" for 
material; but as soon as the material is de- 
livered and the stock clerk affixes his signa- 
ture, the slip indicates that the material has 



EFFICIENT USE OF MATERIALS AND TIME 113 

been " delivered ' ' to the machine or work- 
man specified. From this slip we know that 
on June 3, Smith, the stock clerk, delivered 
ten arm brackets to workman 30 — drill de- 
partment, as requested by Jenkins the fore- 
man, and as the order department receives 
this slip right after the stock clerk signs it, 
the department has a means of knowing when 
these ten parts were issued as well as where 
they were delivered. If we file this slip 
against the drill department, we really 
charge it and credit the stock room for the 
parts, for these slips are used as authority 
for posting to the stock cards. When the 
order department has done this with all of 
the " material cards,' ' it has in its possession 
a means of advising anyone who wants to 
know just where any part is — providing the 
part is followed from place to place in some 
way. This can be done by using certain in- 
formation and having in the order depart- 
ment a file of drawers where these slips, 
Form 15, can be filed. 

This information comes from different 
sources. In the order file, we have the "re- 
serve orders ' ' for which there is no material 
— we have the lists of finished parts, Form 
14, which the stock clerk has delivered to the 



114 MAXIMUM PRODUCTION 

assembly department, and we have the requi- 
sition, Form 15, which comes from either the 
stock clerk or machining department as the 
case may be. A form of receipt is nsed to 
cover the materials passing behveen the de- 
partments of the machining department, 
Form 16, these being sent to the office when 
one of these departments receives material 
from another. The importance of this can- 
not be overestimated as it places each de- 
partment on its own feet, each one checking 
the work of the other as well as fixing re- 
sponsibility. The machining department and 
the stock room require no receipt from the 
assembly department for the reason that the 
requisitions for material are " delivered' ' 
slips after materials have been delivered, and 
are virtually equivalent to receipts. This is 
our fourth source of information, the fifth 
and final one being a daily list of receipts 
from the stock clerk covering finished parts 
received from the machining department. 
This knowledge is valuable and on tap so 
that manipulation is the only thing necessary 
to be able to furnish information concerning 
the work under way. 

Take, for instance, Form 15. Upon receipt 
of this slip from the stock room, the clerk, 



EFFICIENT USE OF MATERIALS AND TIME 115 



MATERIAL RECEIPTS 


We have just received from the Ai-4i& Department, the list of 

parts below described 


# 


Piece 


Drawing 


Name 


Order 


/ d 


>vjio 


Aiyo. 


tCU^u /\J~*&lC&6& 


/3LS VJ 


3 


3 CuO 


A/ 40 


(Petto 


/6a FA 


s 


* 3^ 


JO ?6 


(_^y ^<-<-^--<=6^t-^L 


'30 IS 


2.0 


y io 


Vt?0 


cu„ 


Yxa. S 








/ 
























































































\ 








































































































II 




Date V^A By U/^Ic&vl. Department /7 ^£"T A 



The Eng Magazine 



FIG. 16. RECEIPT FOR MATERIAL PASSING BETWEEN 

departments. (See next page.) 

who knows that Jenkins is in charge of the 
drill department, marks in one corner — 



116 MAXIMUM PRODUCTION 

"Drill, 6-3-6/ ' as shown, and files in the 
drawers above mentioned back of the guide 
marked 125, the arrangement being numeri- 
cal. On the 8th, a receipt, Form 16, comes 
from the Lathe and Planer Department, the 
first item being the ten arm brackets, order 
125.43. The clerk then removes the slip, 
Form 15, from its numerical place and marks 
"L. and P., 6-8-6," placing it back in its po- 
sition again. On the 10th, a list of receipts 
comes to the order department which con- 
tain this item of ten arm brackets, and the 
clerk then marks on the slip as is shown in 
the illustration. It is again filed where it 
remains until the assembly department requi- 
sition for these ten parts is received from 
the stock clerk, dated the 12th. The slip is 
marked to correspond, and filed with the as- 
sembly-department slip, for future reference. 
It is therefore evident that any reference 
to 125.43, ten arm brackets, will show the 
condition of the order at any time after the 
material was delivered. Applied to all 
orders, it follows that the drawers, the "re- 
serve-order" file, and the lists sent to the 
office by the assembly department through the 
stock clerk, will show at all times the condi- 
tion of any order ; the value of this cannot be 



EFFICIENT USE OF MATERIALS AND TIME 117 

overestimated, and while a casual reading 
would seem to indicate that the method is too 
complex to be practical, consideration will 
show that this is not the case. It should need 
no argument to convince a manufacturer 
that material should not be delivered any- 
where without a record being made of the 
transaction, either in the form of a receipt 
or requisition, and that the stock clerk should 
make a list of all the materials he receives 
from the machining department, as the re- 
ceiving clerk does for all materials received 
from outside. The information serves a pur- 
pose in itself, but why not go further with it! 
What would do more good than an arrange- 
ment whereby this information can be used 
to inform anyone regarding the condition of 
orders, especially when one considers that a 
few hours each day will do the work, and 
that in a plant of any size, where a number 
of machines are being built — the parts num- 
bering into the thousands — if regular and 
stock orders are considered, it is out of the 
question to expect any one man or group of 
men to know all about every part of every 
order at all times. Provide some means of 
informing them regarding the progress of 
the orders and the location of the parts, and 



118 MAXIMUM PRODUCTION" 

they are then in a position to take advantage 
of the information for they will know how to 
proceed to a desired end as the following will 
show. 

If the works manager wishes to "get 
after" an order, he gives his "list of mate- 
rial' ' to the order department, with instruc- 
tions to advise him regarding the condition 
of the various parts. These parts are either 
on the assembly floor, in the lathe and planer, 
drilling, or milling departments, in the stock 
room as finished parts received from the ma- 
chining department and awaiting requisitions 
from the assembly department, not as yet 
withdrawn from stock, while some of the ma- 
terial necessary to finish the order may not 
have been received by the stock department. 
The order department adopts the following 
symbols as indicating the condition of the 
parts : 

W — Orders waiting for material. 

A — In Assembly Department. 

M — In Milling Department. 

D — In Drilling Department. 

L — In Lathe and Planing Department. 

F — Finished parts in Stock Eoom ready 
for assembly. 

N — Parts not as yet withdrawn. 



EFFICIENT USE OF MATERIALS AND TIME 119 

The clerk can turn to his file or orders wait- 
ing for materials and place a letter W in the 
v column of the "list of material" for parts 
whose numbers correspond to the numbers 
of the parts on the list. He then takes the 
list from the assembly department, Form 14, 
prefixes the letter A for parts in the assem- 
bly department, after which he refers to the 
drawers where the slips, Form 15, are filed, 
and checks each one covered by the order 
number in question against the list of ma- 
terial. After he has done this he will have 
a number of parts against which there are 
no check marks which must be the parts that 
have not been withdrawn from stock up to 
time the list is checked, these parts being 
marked with a letter N. When the works 
manager again gets the list — and this process 
can be repeated as many times as desired — 
he knows the exact condition the order was 
in up to within a short time previous to the 
checking, and even if the list shows a piece 
as being in the drilling department that has 
gone on to the milling department no harm 
has been done, for he knows where to start 
his investigation, which is far better than to 
have no definite point from which to begin. 
If, on the other hand, the works manager 



120 MAXIMUM PRODUCTION 

or any of the foremen desire to know con- 
cerning any part, the file in the office will 
supply the information. As before stated, 
the necessary facts are at hand as soon as 
material is delivered or transferred, and a 
little work will put the information in shape 
for use whenever needed. . There is a dif- 
ference between having information in every 
conceivable shape and having it properly 
classified and on tap for immediate reference. 

Further information is at the disposal of 
the shop management in the shape of the 
daily time cards turned in by the workmen, 
all time being posted to the reverse side of 
the production order each day. Eeference to 
the orders covering parts or to the orders 
covering assembling work will therefore 
show how much time has been consumed on 
an order up to the day previous to the refer- 
ence. The clerk can furnish the works man- 
ager with information regarding the condi- 
tion of an order, by turning to the file of live 
production orders, and when checking 
through the various parts that are in the ma- 
chining department, mark opposite these 
parts : 

T — Time recorded. 

N — No time recorded. 



EFFICIENT USE OF MATERIALS AND TIME 121 

This will show him not only where the 
parts are, but whether they have been worked 
on or not, and through the information fur- 
nished him he can plan for maximum pro- 
duction under the best conditions, for once 



WORK WANTED AT ONCE 




gently npprfprl. fiivp thorn prp.ferpnpp rtwr nil nthpr nrHpri W.M 


Order 


# 


Piece 


Drawing 


Order 


# 


Piece 


Drawing 


























































































< 























































































































































FIG. 17. REQUISITION FOR URGENT WORK. 



he knows the shape an order is in, personal 
effort will do the rest. He will want to make 
certain demands on certain departments 
after he knows what work is to be given 
preference over other work, using Form 17 
for this purpose. 




122 



EFFICIENT USE OF MATERIALS AND TIME 123 

The scheme of numbering here shown will 
facilitate investigation. A large number of 
concerns have a series of numbers to cover 
the various orders for machines and another 
series of numbers covering the parts of a ma- 
chine. For instance, an order for a certain 
machine might be No. 3,140 while the first 
part might be No. 11,908, the second part 
No. 11,909, etc. It is evident that in looking 
up an order there is no such connection be- 
tween the two series of numbers as in the 
case of the method advocated above. An 
order for a machine may have 250 as its 
number, while the first part would be 250.1, 
the second part 250.2, the third 250.3, etc. 
As soon as the order gets under way, the 
workmen know that the parts are for order 
250 and the assemblers will soon fix 250 in 
their minds, so that when it is desired to 
follow up an order, any person looking for 
the parts that go to make up 250 will have 
no great difficulty in finding them. 

The assembling of certain parts into 
groups, to be carried in stock for final as- 
sembly, should be given careful considera- 
tion by progressive manufacturers. In the 
fifth chapter it was shown that even special 
machines may have some standard parts, 



124 MAXIMUM PRODUCTION 

and a study of the product would show where 
grouping could be done to such advantage 
as would greatly facilitate final assembly. 
If we have thirty separate parts to assemble, 
time required to assemble being fifty hours, 
and by grouping certain parts it is found that 
only ten pieces are necessary to assemble, 
fi.ve pieces being groups composed of two or 
more parts each, as the case may be, the 
final assembly time will be considerably less- 
ened; any saving in assembly time is always 
an object, especially when delivery is the im- 
portant consideration. The work of group- 
ing can be done in odd moments or when 
there is a slackening in orders, the results of 
which would certainly justify the efforts. 

To eliminate the delays and annoyances 
that can usually be found, and to get maxi- 
mum production in the shortest time possi- 
ble, further aid should be employed as fol- 
lows : 

1 — An intelligent advance planning of all 
work. 

2 — A standardization of operations. In 
processing men need jobs, material, draw- 
ings, tools, gauges and jigs, and it should 
be the duty of someone to see to it 
that these items are supplied them, not one 



EFFICIENT USE OF MATERIALS AND TIME 125 

thing at a time, nor all of them just as soon 
as they have completed a previous job, but 
in advance. As orders come in, as shown by 
the methods herein described, they should 
be analyzed as to consecutive operations ; a 
date of completion determined; a planning 
schedule drawn up and job tickets written up 
and classified as " available'' or "not avail- 
able." As the work is planned for men and 
machines, they should be arranged in a 
planning board as follows : 

1 — Jobs in operation. 

2 — Jobs to be taken up next. 

3 — Jobs to follow. 

It is essential that the planning schedule 
be kept up to date at all times, from which 
it is an easy matter to prepare for work 
coming in, and to get in readiness, in ad- 
vance of requirements, what is necessary to 
get out the work. Intelligent planning and 
dispatching of all work in a machine shop — 
machining, assembly and erection, trucking 
and transportation, tool making — is a mighty 
factor in increasing efficiency, and in con- 
junction with the supervisional agency de- 
scribed in this chapter, will work wonders 
in any shop. 

The matter of standardization of opera- 



126 MAXIMUM PRODUCTION 

tions is another important consideration. 
There are two things to keep in mind — 

1 — That there is the unnecessary in the 
work. 

2 — That there is a reasonable and proper 
time to allow for completing it. 

By no stretch of the imagination is it pos- 
sible to conceive how a hasty, superficial ex- 
amination, which is the usual procedure, can 
determine the unnecessary, or the best time 
to allow for a piece of work. It is because 
it has been thought possible that the usual 
method of setting piece rates has been re- 
sponsible for so much dispute and restricted 
production in the past, and this will continue 
just as long as such unscientific methods of 
determining equivalency are employed. 

One of the most efficient means of estab- 
lishing what is wrong with the conditions, 
where the faults are in the planning, and the 
best time to allow for any work, is through 
a careful and scientific analysis, listing out — 

1 — What is done. 

2 — How it is done. 

3 — The equipment used. 

4 — The operation itself. 

5 — The working conditions. 

6 — The time taken. 



EFFICIENT USE OF MATERIALS AND TIME 127 

All of which, carefully studied, will reveal 
facts that will prove of material assistance 
in any campaign of shop betterment. Once 
this standardization is completed, it is pos- 
sible to determine the ratio between the 
time taken and allowed, applicable to men, 
machines, foremen, department, on the basis 
of which an "efficiency reward' ' could be 
made, which would do more to create a 
spirit of co-operation and a willingness to 
turn out a maximum amount than all the 
driving tactics that could be schemed out by 
the keenest mind existing. 



Chapter VII 

BETTER DELIVERIES— MORE SATISFIED 
CUSTOMERS 

TT was a wise man who decided to incor- 
A porate as a part of his letter-head: 
"Agreements subject to strikes, accidents, 
fires and other causes beyond our control ;" 
but little did he think how many times it was 
destined to be used, not only to cover such 
cases as fires, accidents, and excusable causes, 
but many inexcusable ones as well. Today 
the clause above quoted is either on all busi- 
ness stationery or is taken for granted, and 
it is safe to say that nearly every business 
house uses it many times during a year to 
explain their nonfulfilment of promises. 
While I will grant that a manufacturer is 
often in no way to blame because he has 
failed to forward his shipment according to 
schedule, there are a greater number of 
times when no real excuse exists — unless per- 
haps it is carelessness, which of course would 
not be offered as an excuse even by the 
frankest offender. 

128 



PROFIT IN PROMPT DELIVERIES 129 

Every manufacturer who reads this chap- 
ter is a receiver of materials as well as a 
shipper, and while the argument is intended 
more for the shipper than for the receiver of 
materials, we will start the discussion from 
the viewpoint of the receiver. 

Is it not a fact, that almost daily you are 
disappointed in not receiving the notice of 
shipment, covering materials your works 
manager is anxiously awaiting! 

Is it not a fact, that almost daily you re- 
ceive in your mails about such replies as the 
following, in answer to your letters asking 
why the materials you have ordered have not 
been shipped as promised? 

Yours of the 10th received. We regret to advise 
that owing to causes over which we had no control 
we have found it impossible to make shipment as 
promised, but we expect to forward them about the 
25th. 

Is it not a fact that almost daily you or 
your assistants call up the freight offices, re- 
garding certain materials which have been 
shipped, only to be advised — "nothing as 
yet"? 

These are conditions that exist almost 
everywhere, and while they would not be 



130 MAXIMUM PRODUCTION 

worthy of more than passing consideration 
if they only ruffled a man's temper, as they 
sometimes do, they are entitled to careful at- 
tention as they directly concern the success 
of any manufacturing enterprise. You no 
doubt feel at times like doing business with 
some other concern than the one you are now 
dealing with, thinking perhaps that you 
might get better deliveries by so doing, which 
brings me to this question: 

Do you as a receiver of materials, feeling 
as you do over your disappointment in not 
receiving notices of shipment — the letters of 
excuses and the statement, "nothing as yet," 
ever stop to consider that the receiver of 
your materials may be in exactly the same 
position as you are often in! 

I will grant that you often look to those 
from whom you purchase, in order, to make 
proper deliveries to your customers. Your 
customers, in their turn, whether they have 
their trade looking to them for shipments 
when promised or whether they are direct 
users of what they purchase from you, look 
to you for as prompt deliveries as possible, so 
that your success (in their eyes at least) de- 
pends to a large degree upon your ability 
either to make prompt shipments, or to con- 



PROFIT IN PROMPT DELIVERIES 131 

vince them that their interests are receiving 
your best attention. If yon cannot do this, 
you may be running the risk of having some 
of your business go to your competitors. 

You may ask how can the maximum re- 
sults be obtained in the way of getting ship- 
ments off according to schedule! The best 
results along these lines can be obtained only 
when proper attention has been given to con- 
ditions, present and future, before making 
a promise, and the work followed carefully 
until you know that you will be able to ship 
as promised, or that you will not be able 
to do so. 

A promise cannot keep itself any more 
than a shipment can make itself, yet this 
seems to be the principle that so many work 
upon. I have known cases where promises to 
ship have been made and nothing more has 
been thought about them until letters were 
received asking for information as to the 
shipments, and as business courtesy de- 
manded replies, the letter heretofore quoted 
was the result. I am therefore of the opinion 
that a promise composed of about one-quar- 
ter discretion in making and about three- 
quarters energy in fulfilling, will go a longer 
way towards enabling the manufacturer to 



132 MAXIMUM PRODUCTION 

ship according to schedule than anything 
else. By * 'energy' ' I do not mean hustle and 
bustle, at the last minute, in an almost super- 
human attempt to rush the work through the 
shops and onto the cars, in an effort to "make 
good," but an energy that is in evidence 
from the time the order is received and the 
promise made until the material is on the 
cars and finally at its destination. Any ar- 
rangement that will enable you to make de- 
liveries as close to schedule as it is possible 
to make them should have your careful at- 
tention, for it will mean much in the way of 
more satisfied customers, better deliveries 
from those from whom you purchase, and 
lower costs through an increased production, 
all these being points which materially assist 
in making an enterprise successful. 

It is very likely that almost every order 
you receive is accompanied by a request to 
state about when shipment will be made; is 
it not well to have some well defined method 
of procedure in filling your orders? It 
should need no argument to convince a manu- 
facturer that the shipping of materials when 
promised is beneficial to the whole business 
structure. 

In any establishment of ordinary size, 



PROFIT IN PROMPT DELIVERIES 133 

those concerned in the handling of an order 
from its receipt nntil shipment are : 

Chief Order Clerk. 

Works Manager. 

Chief Stores Clerk. 

Shipping Clerk. 

Indirectly, the customer depends npon the 
shops for his shipment; bnt directly, he de- 
pends upon the shipper, who in turn cannot 
make shipment until the shops furnish him 
the finished product, the shops in their turn 
look to the stores department for the mate- 
rials necessary to complete an order, and 
naturally nothing can be done until the order 
department has given the necessary orders 
for the work. At least, this should be the 
case; but there are places where verbal 
orders seem to receive as much considera- 
tion as written ones — a practice that is pro- 
ductive of no possible good. At any rate, 
the order department is looked to indirectly 
by all concerned in the manufacture of any 
article ; so without further argument, we may 
assign to this department the important duty 
of keeping track of all orders from the time 
of their receipt until delivery is finally made 
to the customer. 

If the four men heretofore mentioned are 



134 MAXIMUM PRODUCTION 

allowed to act as one body, with full power, 
the result is going to be better deliveries no 
matter under what conditions the company 
may be operating. Organize a committee, 
composed of these four men; make them re- 
sponsible for promises and deliveries — and 
you can depend upon it that they will exercise 
care before they set a time when an order 
will be shipped ; for in their discussions, they 
will (or should) ascertain how much of an 
order is ready to ship, how much must be 
built, what is in stock ready to assemble, 
what is in stock ready to process, what must 
be purchased outside and about when this 
material can be secured, how long it will take 
the shops to process and assemble, etc. ; and 
if track is kept of the progress the order is 
making, from time to time, there is every 
reason to expect that the shipment will go 
forward about when promised. 

Let us take, for example, a plant manu- 
facturing engines and boilers, and let us out- 
line the arrangement that will enable the 
company to make more prompt deliveries. 
We will assume that the company has al- 
lowed a committee to be formed composed of 
the chief order clerk, works manager, chief 
stores clerk, and shipping clerk, the order 



PROFIT IN PROMPT DELIVERIES 135 

clerk being responsible for the routine and 
clerical detail connected with the work. As 
the mails are opened and sorted, all orders 
are naturally turned over to the order de- 
partment, and these orders can be written up ; 
but before sending them to the various de- 







r 


a 


138466780 10 


11 12 13 14 16 16 17 18 10 20 21 22 23 24 26 26 27 28 | 


|30 31 




OFFICE 


COPY 




Sold To William Jenkins and Company 

Address Utica. Now York 

Destination 

Ship Via Fast freight 


Buffalo. N. Y.. June 23 1907 
Date Sold June 21 1907 
Sold By Johnson 
Our Order* 3445 
Their Order* A 2558V 




One cylinder head 


X 442 


3441 




One cylinder 


B 20 


2811 




One piston 


X 440 


344 J 






This Is a rush order. 





The Eng.MdgazlTM 
FIG. 19. INITIAL, EECOED OF ORDER. MADE IN QUADRUPLICATE. 

partments, they are referred to the commit- 
tee before mentioned, to be acted upon daily, 
along the lines just suggested. Four copies 
of each order should be made, one for the 
office (Figure 19), one for the shipper, one 
for the works manager, and one to be sent to 
the customer as an acknowledgment of the 
order (Figure 20). It will be noticed that 



136 MAXIMUM PRODUCTION 

Form 20 bears the possible date of shipment 
while it is checked at the top under the same 
date as shown by the clip. The copies for 
the works manager and the shipper should 



ACKNOWLEDGMENT 



Buffalo.N.Y., June 23 1907. 
Sold To William Jenkins and Company Date Sold June 2 1 1 907. 

Address Utica. New York Sold By Johnson 

Destination " " Our Order # 3445 

Ship Via Fast freight Their Ordor# A 25589 



One cylinder head X 442 3441 

One cylinder B 20 2811 

One piston X 440 3441 

This Is a rush order 



We herewith acknowledge receipt of your order, which has been properly entered as abeve, 
for which accept our thanks. We will endeaver to make Shipment on or before 
l4D?.??.l?PJ. THE ENTERPRISE COMPANY. 



FIG. 20. ACKNOWLEDGMENT OF ORDER. 

be marked in the same way by using the 
metal markers. Upon filing these orders in 
an alphabetical file, we have each order filed 
by name of customer and cross-indexed by 
possible date of shipment; and as the three 
individuals most concerned have copies of 
the orders before them, it can be readily seen 
that it is possible for each and every one of 
the three to keep track of the progress of an 
order until the shipment is made. 



PROFIT IN PROMPT DELIVERIES 



137 



In conjunction with this method of han- 
dling the orders, it would be well to use a 
recapitulation sheet, compiled each day by 
the order department, to be considered by 
the committee before mentioned at its daily 
conferences. A sample (Figure 21) is here 
shown with entries. This will show the com- 



SHIPMENTS ARRANGED 
Pot__Lune-29J.?Q7 



■ According to our records,the following shipments have been arranged for the above date. 
If anything has occured in your department to change your plans, advise so. a new date 
maybe set and the customer notified of the change. 



Name 



Material 



Fgt. Exp. Order £ Can wp ship on above date New 
Yes j No | If not, why" | Date 



Smith and Sons 
Wra. Jenkins and Co. 



Jones-and Co. 

Johnson and.Frank 



Engine base 
Cylinder with head 

and piston 
Complete Engine 
Boiler Fronts 



Error in shop 



3445 
2660 
3010 



THE ENTERPRISE COMPANY, 

Order Department, 
Per....F^A.Jamgs 



the Engineering Magazliia 
FIG. 21. RECAPITULATION SHEET FOR SHIPMENTS ARRANGED. 



mittee the total shipments promised for any 
one day, and by having each day's slip show 
the shipments arranged for the following 



138 MAXIMUM PRODUCTION 

day, it is an easy matter, in case it is abso- 
lutely impossible to make certain shipments 
as promised, to set new dates for shipment. 
It should be the duty of the order depart- 
ment to inform the customers of the changes ; 
this will not only forestall complaints, but 
will create the impression in the minds of 
some customers at least that their interests 
have not been ignored altogether, for if you 
receive an unsolicited letter from a concern 
from whom you are purchasing, in which 
they state that they found it was going to 
be impossible to make the shipment as prom- 
ised, but that they would be able to on such 
and such a date, you certainly feel in a much 
better state of mind than if you should re- 
ceive no notice of shipment and no letter 
explaining the reason. 

After a shipment has been made, in cases 
where it is delayed, the manufacturer should 
keep after the railroad company until de- 
liveries are shown. A " tracer" is such a 
common thing that it is not necessary to 
show one here, but the form shown in Figure 
22 should be used in conjunction with trac- 
ers so that the railroad company may be re- 
minded of the fact that they have been asked 
to place a tracer after certain shipments. 



PROFIT IN PROMPT DELIVERIES 139 



SHIPMENTS 


July 5 1907 
t Ceorge Franklin. . ... Agent 
, , New York Central t Railroad 


To the agent. - Let us know at once if you have received any advice regarding the 
delivery of the shipments listed below 


Date of tracer . June 20th 


To t The Howard.Manufacturing Company 
500 Franklin Street 


New York N. Y. 


Date shipped . June 10th 


Materials claimed short 




. of the material 




THE ENTERPRISE COMPANY, 
Per F; A. James 





The Engineering Magazine 

FIG. 22. SUGGESTED FORM FOB TRACER. 

In many instances, upon receipt of these 
notices, the agent will take up the matter 
with those along the line and this will assist 
to a certain extent in bringing about better 
deliveries than would be secured were the 
railroad company to receive no such remind- 
ers. If the agent has received no advice, he 
will say so, and if you take up this point with 
your customers, they will be quick to see that 
your interest did not cease when shipments 



140 MAXIMUM PRODUCTION 

were made — a decided point in your favor, 
and it is on such points as this that the suc- 
cess of your business depends. 

The system is simple, and while it would 
require a little work each day in order to 
obtain maximum results, does not the end in 
view justify the means? Let us sum up 
briefly the advantages to be derived through 
some such system, devised to meet your own 
conditions. In the first place your works 
manager, order clerk, stores clerk, and ship- 
ping clerk all know and have collectively 
agreed upon the dates of shipment, the 
points peculiar to each order having received 
attention before this was done; the orders 
are constantly before them, the metal mark- 
ers showing the dates of shipments to be 
made; and through co-operation, which 
should be insisted upon, they will be able 
practically to see the end at the start. 

The works manager will be in a position to 
plan his work to better advantage, for he 
can notify his foremen what he wants and 
when he wants it, they in their turn giving 
their men the necessary orders and instruc- 
tions that will start the desired work along 
and through the shops in the most systematic 
way, so that in reality we have the whole 



PROFIT IN PROMPT DELIVERIES 141 

force doing their share in an effort to get the 
work through on time. 

The stock clerk will know what stock is 
necessary to get ready for the shops, and he 
will also know what has to be purchased out- 
side. He can make the necessary requisi- 
tions on the purchasing department, with no- 
tations as to when he wants the materials 
that are to be ordered. 

The purchasing department can keep after 
the people with whom the orders were placed, 
which in itself will have an influence in ob- 
taining better deliveries ; for once you know 
what you want and when you want it, you 
can in the majority of cases, by keeping after 
the concerns from whom you ordered, get 
your materials in time to enable you to keep 
your promise to your customers. 

Your order clerk each day will bring to 
the attention of the others the list of ship- 
ments arranged for the following day, and 
if new dates have to be set, it can be done 
and he can so notify the people to whom the 
materials were going. At the same time he 
can take up with the others the possibility 
of getting future shipments off as promised, 
and by keeping track of the details and 
looking after the clerical work, he is in a po- 



142 MAXIMUM PRODUCTION 

sition to give valuable information as to the 
status of any order. 

The shipping clerk, knowing after each 
day's conference what is to go forward 
within the two or three days following, is in 
a position to see to getting everything in 
readiness for shipment on the day set; and 
if anything happens to make it necessary to 
change any date set, he knows it the day 
preceding and can be governed accordingly. 
The shipping clerk is therefore in a position 
to make his work count for something, as 
he is able to concentrate his attention upon 
the accomplishment of something definite and 
is not forced to do a lot of work that will 
count for nothing. 

In brief, we have a combination of brains 
working together along the same lines and 
with the same end in view, and this will ac- 
complish more than could be accomplished 
by individual effort along widely different 
lines. The result of such effort would be 
more prompt deliveries and therefore more 
satisfied customers — the desire of every 
manufacturer. 



Chapter VIII 

SCIENTIFIC MANAGEMENT IN THE 
FOUNDKY 

T F the result of the recent rate hearing be- 
■*■ fore the Interstate Commerce Commis- 
sion at Washington does nothing else be- 
yond placing sqnarely before the American 
people the matter of a better and more scien- 
tific corporation management, this in itself 
can be considered an accomplishment of ines- 
timable value; for the outcome is going to 
mean but one thing — an industrial awaken- 
ing which will result in the saving of millions 
of dollars yearly that are now being lost 
through unscientific methods in the conduct 
of business enterprises. 

The hearing brought out the point that 
scientific railroad operation would yield an 
enormous saving, estimated at $300,000,000 
yearly. Senator Aldrich is quoted as saying 
that inefficient governmental management is 
responsible for an estimated loss of another 
$300,000,000 yearly. In other words, $600,- 
000,000 yearly in railroad and governmental 
143 



144 MAXIMUM PEODUCTION 

circles alone — an amount certainly worth 
trying to save. 

If it were possible, therefore, to outline for 
each one of our great industries — automo- 
bile, foundry, machine-tool, electrical ma- 
chinery, etc. — the possible saving that would 
result from a more perfect management, the 
amount in conjunction with that already 
mentioned would result in a figure showing, 
beyond any possibility of questioning, the 
absolute necessity for taking such measures 
as should ultimately produce a nation of 
more efficient and prosperous industrial un- 
dertakings. 

To the skeptic (and unfortunately there 
are many of them) the idea of an ideal man- 
agement is an absurdity, this conclusion be- 
ing based on the assumption that idealism 
and commercialism cannot be merged. To 
those who are of this mind, the statement 
made at the rate hearing by Louis D. Bran- 
deis should be carefully considered: 

We shall show you how scientific management, 
when applied to the simple operation of loading a 
railroad car with pig iron, increased the perform- 
ance of the individual worker from 12% to 47 tons; 
how, when applied to shovelling coal, it doubled or 
trebled the performance of the shoveller. How, when 
applied to the operations of a machine shop, it de- 



SCIENTIFIC FOUNDRY MANAGEMENT 145 

veloped, in certain operations, increases ranging from 
400 to 1,800 per cent. How, when applied to brick 
laying, the day's accomplishment rose from 1,000 to 
2,700 brick. 

In this connection the following editorial 
which appeared in a recent issue of the 
Progress Magazine will also prove of in- 
terest : 

Idealism and Commercialism are not antagonis- 
tic. Idealism is the very life and spirit of the com- 
mercial world. It is the purpose of Idealism to con- 
tinually enrich the human mind so that there will 
be more and more to work with; it is the purpose of 
Commercialism to work out in practical life, what- 
ever the mind can secure.. Idealism is the mother of 
the idea, the plan, the invention. Commercialism is 
the father of the finished product. It is Idealism 
that discovers the thing and Commercialism that 
makes it serviceable or puts it to work in actual life. 

What has this to do with the foundry in- 
dustry? More than one may at first imagine. 
The closer we approach an ideal state, the 
more we are able to attain. The loftier our 
ideal, the greater the achievement in the long 
run, from which it is easily seen why the real- 
ization of the greatest success in the foundry 
or any other business is contingent upon — 

1 — Having an ideal. 

2 — Making a consistent effort to attain 
this ideal. 



146 MAXIMUM PRODUCTION 

3 — Placing the ideal high enough to make 
the effort worth while. 

We get in life about what we deserve, and 
this applies to the corporate enterprise as 
well as to the individual. If we deserve 
much, we attain in proportion. A writer has 
well said, "Men fail for lack of some aim, 
but better than some aim is one aim by which 
good fortune is labelled ' reward by divine 
right.' " 

In the foundry industry, investigation 
would develop the fact that it has suffered 
much from a lack of one aim, for it is safe to 
say that there are but few cases where the 
rule has been one aim placed high enough 
and conscientiously pursued. 

This may seem a criticism not borne out 
by the facts in the case. If it is possible, 
therefore, to place before those who are in- 
terested in the industry a mental picture of 
conditions as they exist (to a greater or less 
degree) in almost every foundry, the strength 
or weakness of the above charge may be 
established. With this end in view, the fol- 
lowing short story has been written; and 
while perhaps a radical departure from the 
usual style of engineering discussion, it is 
hoped that the picture the story will call up 



SCIENTIFIC FOUNDRY MANAGEMENT 147 

may more strongly emphasize many of the 
weaknesses that will be recognized as exist- 
ing. 

Is This Efficiency? 

Jennings, the new moulder, had been in 
the shop two days ' ' getting his hand in, ' ' as 
he termed it, and was on hand on the morn- 
ing of the third day, prepared to show the 
" outfit' ' that he could hold his own with the 
best of them. To his helper, a hard-work- 
ing chap, he made the remark : 

"Are you ready for a hard day's work, 
Kyan?" 

"I am ; and if I was not, I 'd have to, any- 
way. Those who work in this shop go some, 
I can tell you. It's run, jump, and chase 
around the whole blessed time, and you'll 
find it out before you have been here very 
long. ' ' 

"Well, perhaps you're right. I did my 
share of this jumping business for two days, 
but I'm a new hand and didn't expect to 
have things handed to me on a platter. There 
goes the whistle — let's get under way." 

Arriving on his floor, Jennings looks it 
over for a few moments, and, turning to 
Eyan, says with disgust: 



148 MAXIMUM PRODUCTION 

"Can. you beat that for a sand heap? The 
night gang must have thought I wanted to 
make mud pies instead of moulds. It's wet 
enough to take a bath in. Yesterday morn- 
ing the sand was as dry as the Sahara and 
as hot as the place I told my side partner 
to go to. And will you look at the gaggers 
sticking out of the sand — not one of 'em re- 
moved. ' ' 

At this point the shop foreman appears 
on the scene. 

"Say, boss," says Jennings, "is this the 
way the night gang is supposed to leave the 
sand heap!" 

"Well, no ; but it can't be helped, so sail in 
and fix it up so you can start a job I have 
picked out for you." 

"All right, boss; I'm a good sailor, but I 
can't make moulds and cut sand heaps at the 
same time." 

"I don't see, Jennings, as there is any ne- 
cessity for bristling up so over it. Other 
men in the shop are up against the same 
thing this morning and I'm not asking you 
to do two things at once." 

As the foreman walks off Jennings says 
to Eyan: 

"Go and get some dry sand and a little 



SCIENTIFIC FOUNDRY MANAGEMENT 149 

new sand also, while I perform the high-class 
stunt of removing gaggers from a sand heap 
at forty cents per hour. Here goes my fine 
start that I was banking on." 

After getting the gaggers and rods out of 
the heap, tempering the sand, and getting it 
in readiness for nse, he tells his helper to 
mix some facing while he hunts the foreman. 
Meeting him down by the cupola, he says : 

"lam ready for that job you mentioned 
just now." 

"Well, Jennings, we were notified that the 
pattern I was going to give you has got to 
be changed, and I haven't had time to look 
up another for you since. Come with me and 
we will find something." 

After a trip to his office to look up his 
orders, he takes Jennings to the pattern 
house and has a pattern brought out. 

"Here, Jennings, make one from this pat- 
tern. I will have the cores made right away, 
so they will be ready when you are. See 
Tony, the flask boss, about a flask for it." 

Going back to his floor, he tosses the pat- 
tern onto the sand, looks it over, and meas- 
ures it up, after which he asks Evan where 
he is likely to find Tony. 

"Find Tony? Sure and you Ve got me this 



150 MAXIMUM PRODUCTION 

time. Try the flask yard; if he's not there, 
try the pattern house; if this doesn't locate 
him, you will probably find him in the back 
end of the'core room eating a lunch. If this 
don't work, start all over again. Tony is a 
hard man to find when you want him." 

"Here is where the rebellion starts, Eyan. 
I am not. going to do a 'hot foot' after Tony. 
I didn't enter a Marathon race when I hired 
out. I'm here to make castings, if I can ever 
get started. Look him up and tell him I want 
a flask, and be quick about it." 

Eyan starts out to find Tony while Jen- 
nings goes over to the moulder next to him. 

"Well, Bill, how is she going this morn- 
ing?" 

"Oh, after a fashion. Things could go a 
lot better. I've been on this job two days 
now and I feel like shaking the whole thing 
out. First they give me a pattern that nearly 
pulled the mould to pieces when I drew it, 
and then to improve on the thing I get a flask 
that's ready to fall apart. The cores don't 
fit, either, and I've wasted I don't know how 
long, filing and fitting to get them into place. 
They must make their cores out of cement 
here ; they are so hard." 

"What's the matter with the place, Bill? 



SCIENTIFIC FOUNDRY MANAGEMENT 151 

Are they running a foundry for fun or to 
make money ?" 

"Search me. I don't see any fun in the 
thing and I can't figure out where any one 
would get rich here, judging from some of 
the boneheaded stunts I've seen pulled off." 

Eyan comes along with the statement that 
Tony is busy getting flasks for other work 
and will be up as soon as he can. 

"Have I got to loaf around on this job 
waiting until Tony gets good and ready to 
get me some of their old fire-wood to work 
with? Where is the boss?" 

"Say, boss," as the foreman approaches, 
"why can't Tony stretch a point and get a 
flask for this job? At the rate I'm going I'll 
never get started." 

"All in good time, Jennings; all in good 
time. You must remember that you are not 
the only man in the shop to get started in 
the morning. There are a few others." 

"All right, if it suits you, I suppose it will 
have to go; but I'll be blessed if I see where 
you get any good out of me at this rate." 

"Oh, you can speed up when you get your 
flask." * 

About fifteen minutes later, Tony appears 
and, measuring the pattern, says : 



152 MAXIMUM PRODUCTION 

"I'll have to bring you a four-foot-six by 
seven-foot by three-foot-six flask for this 
job.- 

"Hold on a minute — I'm not figuring on 
making two of those to the flask." 

"I know that, but we don't have any 
smaller flasks handy now — all in use." 

* ' How do you know 1 Did you look 1 ' ' 

"I don't have to. I know what we have 
in the yard." 

"Well, you must be a star if you do; for 
from what I saw of your fine flask yard, it 
would take a Philadelphia lawyer a month 
of Sundays to figure it out." 

"What is it to you! You are paid to make 
moulds — not butt in about the flasks. I'll 
attend to that part." 

"All right, Tony. Go as far as you like, 
but get the flask on the floor so it will look 
as if I was doing something. It's a good 
thing for me, Ryan, that this is not a piece- 
work job, for if this is a sample of what a 
man has to put up with I would earn but 
little." 

Jennings, at a call from the moulder next 
to him, goes over to help him close a mould. 

"Lift her off, Bill. I saw some sand drop 
from the cope." 



SCIENTIFIC FOUNDRY MANAGEMENT 153 

" Just what I expected. It's a wonder the 
whole thing did not fall out. The cope is a 
dandy. ' ' 

The foreman happens along, and, noticing 
the fall-out, exclaims: 

"What is the matter, Bill? Didn't you 
ram and secure that cope properly ?" 

"I did the best I could with it. The cope 
is too wobbly to hold the sand as it should." 

* ' That 's right — blame it on the cope. Why 
didn't you let me know it was in need of fix- 
ing, or tell Tony to have the flask carpenter 
tighten it up for you?" 

"If you remember, boss, I called your at- 
tention to a flask the other day, telling you it 
needed fixing, and you told me to use it ; that 
it was plenty good enough for the job. I 
thought this time I would make no kick." 

1 ' Well, in the future let me know when you 
think things are not right, and I'll decide 
what is best to do." 

"What do you know about that, Jennings? 
You get called if you kick and you get it if 
you don't. It's hard to please." 

Tony and his helper bring in the flask, and, 
laying his bottom board, Jennings starts in. 

' ' Well, Eyan, we are under way at last. I 
want to mix that facing you fixed for me a 



154 MAXIMUM PRODUCTION 

little better, and while I'm doing it you oil 
the pattern. It 's covered with dirt and dust. 
Here comes the time clerk for a list of the 
daily doings." 

"What are you doing this morning, Jen- 
nings?" 

"Trying to make a mould. Think I was 
flying an airship?" 

"You seem to be up in the air, all right. 
Yes, it looks as if you were trying, for you 
haven't got very far with the job." 

1 ' I won 't get much further with it, either, 
if you make any more such cracks as that. 
I'd gladly take a round out of you and quit 
the place. What do you know about what 
is going on here 1 My sand was not right in 
the first place ; I had to wait for a job ; then 
waited for a flask, so I can't tell you just 
when I started. I don't know what the job is, 
and I don't care, either." 

"Were you on hand at seven this morn- 
ing?" 

"I sure was." 

"Then I'll have to start you on this job 
from that time. I'll get the details as to the 
job from the foreman." 

"Go ahead, but don't come around in a 
few days to find out what made Jennings 



SCIENTIFIC FOUNDRY MANAGEMENT 155 

take so long on this job. I've lost two good 
hours now for which I am not to blame." 

"All right, Jennings; keep your shirt on. 
Kicking won't help things much." 

"You never said a truer word in your life. 
Kicking seems to get one in wrong here every 
time. ' ' 

As the timekeeper goes on about his duties, 
Jennings rams his drag without any further 
delays. When nearly finished he says to his 
helper : 

"Eyan, I'll soon be ready to roll this drag. 
Go hunt some chains — half-inch chains will 
do — and hurry so I can get the crane before 
Wilson wants it. If I can't get them in time 
there will be another private communion at 
the expense of the company." 

Eyan comes back in a few minutes, report- 
ing that two sets are in use and that the 
night gang broke the third set taking out 
some castings. 

"Get some heavier ones, then, and hurry. 
I'll go with you." 

As Jennings and Eyan return to the floor 
with three-quarter-inch chains, they see Wil- 
son signal the crane man. 

"It's all off, Eyan. No lift for a while. 
Oh, well, go and get some gaggers for me. 



156 MAXIMUM PRODUCTION 

I'll need a bunch of eight-inch gaggers for 
this job." 

One of the moulders happens along with 
the remark: 

' ' Hung up, are you 1 ' ' 

"Yes, waiting for that crane." 

"You'll get used to that if you stay here 
long enough. I've had to wait as long as 
two hours for it when a number of gangs 
wanted to close up at the same time." 

"Oh, I don't mind a wait now and then, 
but it seems that I've been having more than 
my share of them since I came here. If I 
got paid for the work I do and not the waits, 
I'd get mighty little. I may be fussy, but I 
like to keep going." 

"What's the difference? You get your 
pay, don't you? If they don't see where they 
are losing out, it's not up to us to tell them, 
is it ! They 'd make us turn out all the more 
and we'd get nothing extra for it. Let 
well enough alone." 

Wilson lifts off, and calls to Jennings to 
get the crane. Jennings, with the help of 
Eyan, rolls the drag over and after sizing 
up the job, says: 

"Ryan, go and have the flask carpenter 
come to the floor. The cope needs a lot of 



SCIENTIFIC FOUNDRY MANAGEMENT 157 

chucks to take that deep lift, and a couple 
of bars will have to be knocked out to make 
room for those large bosses.' ' 

The flask carpenter soon appears on the 
scene, and, after looking the job over, 
says: 

' ' It 's a shame to change this flask over. It 
was made for a special job. It's too large 
for this job, anyway.' ' 

"I can't help that. I kicked to Tony when 
he brought it in, but he told me to mind my 
own business." 

"Why didn't you ask the boss for another 
piece to put in with this one?" 

"He is giving out the work — I'm not." 

The carpenter chucks the cope, knocks out 
the necessary bars, after which Jennings 
sings out: 

"Two up for a lift! (See them tumbling 
all over themselves to get here, Byan?) 
Come on, just two needed for an easy lift! 
(Fine crowd, this — they seem so anxious to 
assist each other.) Two up — any time to- 
day will do ! " 

Just then the foreman comes along, and, 
noticing the work, says: 

"I don't want that made that way, Jen- 
nings. That lift is too deep for those chucks. 



158 MAXIMUM PRODUCTION 

We had an arbor made for this job and I 
want it used." 

"Well, boss, I knew nothing about an ar- 
bor. You didn't tell me anything about it, 
nor did Tony or the flask carpenter. It 
seemed to me the chucks would be all right, 
so I had them put in." 

"They may suit you, but they don't suit 
me." 

"How was I to know what you wanted? 
You gave me the job and told me to have 
Tony get a flask. You didn't mention an ar- 
bor." 

"No more chewing about it. Have the 
chucks knocked off and send Eyan after the 
arbor. It's out in the yard somewhere. Next 
time you're not sure of a thing, don't go 
ahead until you have asked me about it." 

"All right." 

Jennings knocks off the chucks himself and 
a little later Ryan comes along with the in- 
teresting information that the arbor was 
broken the last time the piece was made, to 
which Jennings exclaims: 

"Well, if this isn't the limit! Does any 
one around here know what is going on? I 
suppose the boss will tell me to put the 
chucks back on again." 



SCIENTIFIC FOUNDRY MANAGEMENT 159 

Jennings hunts up the foreman again, and 
says: 

"I can't use the arbor, boss. It was broken 
the last time the piece was made.'' 

1 ' That 's a fine piece of business. If I knew 
the man who broke it without reporting it to 
me, I'd fire him on the spot. A man has got 
to be in a dozen places at once to keep track 
of what is going on here. Have the carpen- 
ter put the chucks back on again. Hurry, 
too ; it's nearly noon, and you haven't started 
to ram the cope yet." 

"No, and if the afternoon is going to be 
like the morning has been, I won't get the 
job ready for a week." 

"Go easy — accidents will happen." 

Jennings goes back to his floor and sends 
Eyan after the flask carpenter. The noon 
whistle blows, so Jennings proceeds to eat his 
lunch, after which he joins a group of work- 
men. 

"Well, stranger," one asks, "how do you 
like it as far as you've gone?" 

"From what I have seen as far as I have 
gone, I can tell you that I won't go very far. 
I 'm not in love with this hop, skip and a jump 
business." 

"No! You must be one of them 'kill the 



160 MAXIMUM PRODUCTION" 

job guys.' Perhaps if you'd fix it up they 
would make you boss." 

"Soft pedal on the sarcasm. I'm not anx- 
ious to be boss, nor do I go out of my way to 
show off how much I can do in a day, al- 
though I can go some if it is necessary. ' ' 

"What is the particular brand of kick, 
then? Liver complaint, grouch, or what?" 

"Neither. I simply don't like this way of 
working. It's start, then wait; start, then 
wait some more ; commence again, then stop ; 
begin all over again — and you have the gen- 
eral scheme of things here, as far as I have 
been able to size things up. Now, this may 
be all right to those who have not worked in 
better shops, but I have; and the difference 
is something you don't have to put on glasses 
to see." 

"Why didn't you stay in them shops, 
then?" 

"That's none of your business, but what I 
said goes, just the same." 

"Jennings is right," says an old moulder 
standing close to him. "There are shops 
where a man can do more and yet work no 
harder than we do here. The men can work 
to better advantage because they are given 
things to work with ; there is some head and 



SCIENTIFIC FOUNDRY MANAGEMENT 161 

tail to things ; the conditions are better — not 
this rnsh and hustle and then accomplish lit- 
tle. There is no use in kicking though, Jen- 
nings. We couldn't change things if we 
wanted to. If we tried, we'd probably lose 
our jobs for trying to tell them where they 
are losing out." 

"Perhaps you are right. I suppose I'll 
get used to it in time." 

At this the whistle blows and Jennings 
goes back to his floor. Eyan and the flask 
carpenter soon appear, the chucks are placed 
back in the cope, and, with the help of two 
others, it is placed in position. 

"Now, Eyan, bring me some facing while I 
sift, and step lively. . . . That 's enough ; 
now bring me some gaggers ... I asked 
you to bring me some 8-inch gaggers, and not 
10-inch and 12-inch." 

"I got all I could find of the 8-inch 
kind." 

"Do you mean to tell me that the 8-inch 
gaggers that you brought up are all you could 
find f "Where do they keep them here f ' ' 

"In some racks in the middle of the shop 
and on the back end of the floors." 

"Well, I'm going after some. What you 
brought is not enough, anyway." 



162 MAXIMUM PRODUCTION 

A little later Jennings comes back to his 
floor with his hands full of gaggers. 

"Oh, but this is a swell place. The rack 
looks as if a cyclone struck it — gaggers mixed 
up in every possible fashion. I wouldn't paw 
over that bunch if I lost my job. What I got 
I coaxed from the men and they didn't seem 
any too willing to let me have them, at that. ' ' 

Jennings now tells Eyan to get him some 
18-inch gaggers for the deep lift. Eyan 
comes back in a few minutes with the state- 
ment that he couldn't find any. 

"Say, boss," as the foreman comes along, 
"I need some 18-inch gaggers, and the helper 
says that he can't find any." 

' ' There should be some around somewhere. 
We often use them." 

"Where are they, then? I was down to 
the rack a short time ago and don't remem- 
ber seeing any 18 inches long." 

"I don't know just where they are. Do 
you suppose for a minute that I have nothing 
else to do but keep track of gaggers!" 

"Do you think it's up to me to look for 
them? I'm willing to set gaggers and make 
moulds, but I don't see where the company 
gets any good out of me when I chase after 
gaggers." 



SCIENTIFIC FOUNDRY MANAGEMENT 163 

"If you think I'm going to look for them 
for you, you have another guess coming. 
Send your helper for them." 

"He says that there is none at the racks. 
No use sending him among the men, for after 
the swell reception I got from some of them 
when I went after some 8-inch gaggers he'd 
stand a fine show of getting what I need for 
this lift." 

' ' Go get them yourself, then, and quit your 
kicking. You have done nothing but howl and 
fume ever since you've been on the job. If 
you don't like the way I run this proposition, 
you had better quit." 

Jennings is about to tell the foreman what 
he thinks of things, but decides not to do so. 
Going to the floor next to him, he says : 

"Got any 18-inch gaggers, Bill!" 

"No, but I guess Flanders will let you have 
some. He had a few yesterday." 

"Looking for 18-inch hooks, Flanders. Can 
you spare any!" 

"Had some yesterday, but some kind friend 
relieved me of them. Come again." 

"Where do you suppose I could find 
some?" 

"Ask Dr. Cook. He might discover 'em. 
Or, try the racks." 



164 MAXIMUM PRODUCTION 

Going to the rack where the gaggers are 
kept, Jennings asks where the 18-inch gag- 
gers are. On being informed that Peters on 
the cylinder floor has some, Jennings goes on 
his way until he arrives on the floor men- 
tioned. 

1 ' Can I have some of those 18-inch gaggers 
I see on the back of your floor?" 

"You can — not." 

1 1 Why not ? You are not using them. ' ' 

' ' That 's got nothing to do with it. I 've got 
a job that will take that size and I'll need 
them. I got called right by the boss yester- 
day for not keeping what I had, and if any 
one in this shop gets those gaggers from me 
they will have to go some, let me tell you 
that." 

' ' Well, where in Sam Hill will I find some ? 
I'm getting corns on my feet chasing around 
for a few gaggers." 

"You had better see the blacksmith. He 
can get some out for you quicker than you 
can find them around here. ' ' 

"That's a good suggestion. I'll try it. 
Where does he hold out?" 

"At the lower end of the shop, next to the 
air furnace." 

Jennings locates the blacksmith and says: 



SCIENTIFIC FOUNDRY MANAGEMENT 165 

' ' Could you cut and bend me some 18-inch 
gaggers f ' ' 

"I couldn't just now. I'm making some 
new sand hooks for the night gang." 

"Ah, be reasonable. I've been called down 
by the boss because I mentioned gaggers, and 
I've been to three floors in an attempt to find 
some and got left each time. Stretch a point 
and get me out a few, if you can." 

"How many do you want!" 

"Oh, about 25 will be enough, I guess." 

"All right, I'll give you a lift." 

A little later Jennings goes to his floor with 
a supply of 18-inch gaggers and in a few 
moments has them set. 

"Now, Eyan, get busy and shovel in as 
fast as you can. I want to get this cope 
rammed up as quickly as possible. Perhaps 
I can make up a little of the lost time." 

Ryan shovels sand, Jennings rams and 
finally the cope is in readiness to lift off. He 
gets the crane without much delay and is soon 
at work finishing the mould. 

"What's going to happen, Ryan? No de- 
lays for some little time. I don't mind an 
occasional loaf, but I do hate them as a steady 
diet." 

"The day is not over yet, Jennings." 



166 MAXIMUM PRODUCTION 

Jennings finishes as much, as he can of the 
cope, and is about to draw the pattern, when 
he notices two dowel-pin holes in one end of 
the pattern. 

"It don't look good to me, Eyan. I didn't 
notice them before, but those holes mean 
something. Go find the boss." 

When the foreman arrives, Jennings shows 
him the pin holes. 

"Well, Jennings, I see you are in wrong 
again. Don't you know that dowel-pin holes 
are put in a pattern in order to attach an- 
other piece to it ! There is a lip that goes on 
that pattern and I don't see it in the cope." 

"You gave me the pattern yourself, boss, 
and there was no extra pieces with it. I 
didn't notice the holes before." 

' ' That 's right — try and blame it on to me. 
You should have noticed the holes. You are 
paid to think and notice things, as well as 
mould, you know." 

"Am I supposed to check up the pattern 
shop? They should have assembled the pat- 
tern properly before allowing it to go into 
the foundry. Where I worked last the pat- 
terns were right before the work was started, 
and the moulder didn't have to bother to see 
if the parts were together," 



SCIENTIFIC FOUNDRY MANAGEMENT 167 

"Yes, the pattern shop is partly to blame, 
but I still don't see where that lets you out. 
At any rate, get the piece, cut into the cope, 
set the piece and ram over it." 

Jennings goes to the pattern house, gets 
the missing piece and after a half -hour's 
work gets the cope in shape once more. He 
then draws the pattern from the drag, and 
while finishing tells Eyan to go after the 
cores. Eyan comes back with the statement : 

"They are not ready yet. The boss says 
they have been so busy they could not get 
them made this morning. He says he will 
make them now." 

' ' What good will that dome? I '11 be ready 
to core up in about ten minutes. I guess it's 
nix on finishing this to-day." 

The boss comes along at this, with the re- 
mark: "You will have to hurry, Jennings, if 
you want to get that in the heat to-day. The 
blast is on now." 

"You won't get it to-day, boss. No cores 
for the job. Core room too busy." 

"I told Jenkins to be sure and get those 
cores in so that you would have them in time. 
A nice state of affairs. I'll find out why." 

The foreman goes to the core room, and, 
stepping up to the core boss, says : 



168 MAXIMUM PRODUCTION - 

' 'Say, Jenkins, why didn't yon get those 
cores for Jennings, as I told yon this morn- 
ing? He is ready to core up, and he tells me 
they are not made. I gave yon plenty of 
time. ' ' 

1 ' Yes, yon told me abont them, and ten min- 
utes later you come and tell me to get out the 
cores for the Wilkins engine contract as fast 
as I could.' ' 

"I know I did, but the few cores for Jen- 
nings would not have taken long. ' ' 

' ' Perhaps not ; but you said that the engine 
cores were to take preference over all others, 
and I acted accordingly. I'm making the 
cores now for Jennings, but they must be 
dried before he can have them." 

Going back to Jennings ' floor, he remarks : 
"Finish your drag, and then go and help 
Potter close his mould. The cores won't be 
ready for you to-day." 

Jennings finishes the drag as instructed, 
after which he reports on Potter's floor. 

"Well, what do you want here!" 

"The boss sent me over to help you close. 
I can't finish my job. No cores." 

"I don't need any help. I can close this 
alone. The boss knows this, for I have made 
enough of these castings." 



SCIENTIFIC FOUNDRY MANAGEMENT 169 

"Well, will I go and tell him you don't 
want me ? ' ' 

"No; stay on the floor, as long as he sent 
yon. It means that unnecessary time will be 
charged against this job, though." 

"Yes, Potter, I can see that it was not 
necessary to send me over here, but I sup- 
pose that he was too busy to look up another 
job for me. What do you want me to do V ' 

"There isn't much you can do. It's ready 
to close now. You can make the runner while 
I get wedges and clamps and clamp up. Then 
we will put on a few weights and we're ready 
for the iron. I could do the work myself in 
time for the metal, but I guess we can make 
it last the day out." 

Between them they close the mould, make 
the runner, clamp and weight, after which 
they proceed to the back end of the floor, light 
their pipes and discuss things in general. 
About a half hour later their iron comes, the 
piece is poured and the men go home, Potter 
satisfied that he has done a good day's work, 
Jennings feeling rather disgusted over the 
happenings of the day. 

The next morning Jennings is on hand 
ready to finish his mould. He goes to the 
core boss with the remark : 



170 MAXIMUM PRODUCTION" 

"Are my cores ready ?" 

1 ' Yes ; but we have not drawn the carriage 
from the oven yet. As soon as we do this I'll 
get your cores, have them pasted and black- 
ened and send them up to you." 

"All right, but hurry, as I want to get the 
job finished. " 

Jennings goes back to his floor, and in 
about twenty minutes the cores are brought 
up to him. He sails in, sets the cores, then 
secures his work, after which he sends Kyan 
after four 42-inch clamps. Jennings makes 
his runner, then waits for Eyan to bring him 
the clamps. While leaning against his flask, 
the foreman appears. He watches Jennings 
a moment, and then says : 

"Well, what are you waiting for, Jen- 
nings ? ' ' 

"I've sent Kyan after some 42-inch clamps 
and he has not returned with them. ' ' 

"Perhaps he is loafing on the job. You 
had better see where he is." 

" He is probably chasing all over the place, 
the same as I did yesterday when I was look- 
ing for 18-inch gaggers. Clamps and gag- 
gers ought to be where they could be got at 
easily. ' ' 

"That's right, start kicking bright and 



SCIENTIFIC FOUNDRY MANAGEMENT 171 

early, the same as you did yesterday. The 
next thing I know yon will want me to have 
things manufactured to order for you; lay 
everything at your feet and say, 'Mr. Jen- 
nings, there you are ; now go ahead. ' Would 
that suit?" * 

"The fact is, boss, if things had been in 
better shape yesterday, this job would now 
be on the cleaning floor. I can't make moulds 
and do other things at the same time. If you 
want me to be a combination moulder and 
laborer, that's up to you. Don't come 
around, though, and tell me that I'm taking 
too long on a job." 

"I'll tell you what I please about your 
work. You are no better than any one else 
around here. They all have to dig in and 
help themselves, and you can do the same. 
If you are going to do chronic kicking, the 
sooner we part company the better it will be 
for both of us." 

At this Jennings explodes. 

"You've said it right. You can have your 
job. Perhaps you can find some one who 
don't know how a shop should be run — some 
easy mark who is content to chase around 
half his time, doing what should be done in 
advance and ' getting his ' regular because he 



172 



MAXIMUM PRODUCTION 



does not turn out more. Nothing like that 
for mine. ,, 

"All right; I'm satisfied, Jennings. You're 
too high and mighty for me. If you stay 
here you would probably be running the shop 
in a short time." 

' ' No, I 'm not crazy to run the place ; but in 
parting I might tell you that it can be run a 
heap better than it is being operated now. 
Take that from one who knows." 

Time Analysis (in Hours and Minutes) op Work Made by Jennings 
Italics indicate standardized moulding operations. 

Column 1 — Standard time allowed standard moulding operations. 

Column 2 — Actual time by Jennings against these standards. 

Column 3 — Time in trips made by Jennings. 

Column 4 — Time in discussions. 

Column 5 — Time in waits and delays. 

Column 6 — Time in unnecessary work. 

Items. Elapsed Time Distribution. 

Time 1 2 3 4 5 6 

1 — Observing sand heap and 

calling attention of fore- 
man to same 3 — — — 2 1 — 

2 — Removing gaggers from 

sand, cutting over, tem- 
pering, etc 25 — — — — — 25 

3 — Hunting up foreman for 

work and trip with him to 

the office 7 — — 7 — — — 

4 — Trip to pattern house 

with the foreman 4 — — 4 — — — 

5 — Getting out the pattern . . 6 — — — — 6 — 

6 — Trip back to the floor. ... 4 — — 4 — — — 

7 — Sizing up pattern for 

flask and discussion with 

Ryan with reference to 

finding Tony. 3 — — — — — 3 

8 — Conversing with " Bill " 

while Ryan is looking up 

Tony 5 — — — — 5 — 

9 — Waiting for Tony to come 

in and measure up the 

work 10 — — — — 10 — 

10 — Waiting for the flask to 

be brought in 11 — — — — 11 — 

Carried forward 1:18 — — 15 2 33 28 



SCIENTIFIC FOUNDRY MANAGEMENT 173 

Items. Elapsed Time Distribution. 

Time. 12 3 4 5 6 

Brought forward 1:18 — — 15 2 33 28 

11 — Laying bottom board, •pat- 
tern and drag 2 2 2 — — — — 

12 — Remixing the facing sand 4 — — — — — 4 

13 — Discussion between Jen- 
nings and the time clerk. . 3 — — — 3 . — — 

14— Ramming the drag 2:31 2:10 2:31 — — — — 

15 — Going for chains 4 — — 4 — — — 

16 — Waiting on crane to roll 

drag 8 — — — — 8 — 

17 — Rolling the drag 3 3 3 — — — — 

18 — Waiting for the flask car- 
penter 5 — — — — 5 — 

19 — Waiting for cope to be 

chucked and bars cut out 14 — — — - — 14 — 

20 — Waiting for two men to 

assist in placing the cope .4 — — — — 4 — 

21 — Discussion between Jen- 
nings and foreman as re- 
gards chucking cope in- 
stead of using arbor 3 — — — 3 — — 

22 — Knocking out chucks .... 2 — — — — : — 2 

23 — Waiting for Ryan to 

bring in the arbor 9 — — — — 9 — 

24 — Advising foreman as to 

broken arbor 3 — — 3 — ■ — — 

25 — Trip back to floor, send- 
ing Ryan for the flask 
carpenter and waiting un- 
til noon 7 — — 3 — 4 — 

26 — Waiting for flask carpen- 
ter after whistle blows ... 3 — — — — 3 — 

27 — Rechucking the cope .... 8 — — — — 8 — 

28 — Placing the cope 3 — — — — — 3 

29 — Sifting facing sand over 

the pattern 2 2 2 — — — — 

30 — Going to racks for gag- 
gers and getting small 
gaggers from the men. ... 9 — — 9 — — — 

31 — Setting these gaggers 15 12 15 — — — — 

32 — Discussion with foreman 
with reference to the 18- 
inch gaggers 2 — — — 2 — — 

33 — Trip to "Bill" Flanders 
and cylinder floor for the 
large gaggers 6 — — 6 — — — 

34 — Trip to blacksmith and 
waiting until some are 
made 12 — — 2 — 10 — 

35 — Trip back to floor 3 — — 3 — — — 

36 — Setting the 18-inch gaggers 5 5 5 — — — — 

37 — Shovelling sand into cope .6 5 6 — — — — 

38 — Ramming cope 24 20 24 — — — — 

39 — Lifting off cope and plac- 
ing for finishing 3 3 3 — — — — 

40 — Finishing cope previous to 

noting dowel-pin holes 10 8 10 — — — — 



Carried forward 5:51 3:10 3:41 45 10 1:38 37 



174 MAXIMUM PRODUCTION 

Items. Elapsed Time Distribution. 

Time. 12 3 4 5 6 

Brought forward 5:51 3:10 3:41 45 10 1:38 37 

41 — Waiting for foreman after 

noting holes 3 — — — — 3 — 

42 — Discussion with foreman 

as to these holes 3 — — — 3 — — 

43 — Trip to pattern house for 

the missing part 4 — — 4 — — — 

44 — Search for the piece 4 — — — — 4 — 

45 — Trip back to the floor. ... 3 — — 3 — — — 

46 — Placing piece, cutting 

space, setting cope and 

ramming over piece 8 — — — — — 8 

47 — Lifting off cope 2 — — — — — 2 

48 — Finishing the cope 10 7 10 — — — — 

49 — Drawing -pattern from drag 4 4 4 — — — — 

50— Finishing drag 1: 10 1 : 00 1 : 10 — — — — 

51 — Discussion with foreman 

as to cores not being 

ready 4 — — — 4 — — 

52 — Trip to core room next 

morning 5 — — 5 — — — 

53— Trip back to floor 6 — — 6— — — 

54 — Waiting for cores 10 — — — — 10 — 

55 — Setting cores and securing 

them 1:54 1:40 1:54 — — — — 

56 — Closing mould 10 8 10 — — — — 

57 — Waiting for clamps, and 

discussion with foreman 

which results in Jennings 

deciding to quit 16 — — — 5 11 — 

58 — Making runner and clamp- 
ing 12 10 12 — — — — 

Totals 11:39 6:19 7:21 1:03 22 2:06 47 

Percentages 100 63 8.6 3.4 18.1 6.9 

Stories are written, plays staged, sermons 
preached, in order, to drive home a lesson of 
some kind. So with the foregoing — not writ- 
ten for the purpose of indulging in a lot of 
destructive criticism, but with a desire to 
show as forcibly as possible the weaknesses 
of ordinary practice, in order that suggested 
betterments may be better appreciated and 
consideration be given to what "scientific 
management ' ' means to the foundry industry. 



SCIENTIFIC FOUNDRY MANAGEMENT 175 

What, then, are the lessons that a study 
of the story discloses? I know of no better 
way of pointing them out than by putting 
down, in a systematic manner, a careful time 
analysis of the work done by Jennings, as 
shown by the accompanying time-analysis. 
From these figures, which are valuable in 
proportion to the study that is applied to 
them, we find that the job was standardized 
as one which should have been completed in 
6:19 hours, and that 11:39 hours were actu- 
ally spent in making the casting. Conse- 
quently, the ratio of actual performance to 
possible attainment is : 

Standard Moulding Time, 6:19 



Actual Moulding Time, 11:39 
An efficiency of 54.3 per cent, which means 
that 45.7 per cent of the time is inefficiency or 
waste (100 per cent — 54.3 per cent). 

This leads us to two conclusions: 1, that 
a man should be able to spend more time in 
productive endeavor than the figures indi- 
cate, or something is decidedly wrong; and 
2, that the inefficiencies should be rigidly in- 
vestigated and eliminated as rapidly as pos- 
sible. The problem is therefore to arrange 
the factors so that proper consideration can 
be given to (2) in an endeavor to better (1). 



176 MAXIMUM PRODUCTION 

In order to deal fairly with the man, we 
must consider the inefficiency of the man as 
distinct from that of the management. The 
time spent by Jennings against the standard 
of 6:19 was really 7:21; consequently, his 
efficiency is 86.3 per cent (6:19-^7:21) and 
his inefficiency 1.02 hours, or 13.7 per cent of 
the actual time against the standard mould- 
ing operations — distinctly a man inefficiency. 
If, however, a moulder spends 0.25 hours get- 
ting his sand in condition before he can be- 
gin work, this is an inefficiency due to poor 
shop conditions. If he waits 0.50 for a job, 
pattern, and flask, this is an inefficiency due 
to faulty planning, for both of which the man- 
agement of the foundry is responsible. Ar- 
ranging the time factors from the analysis, 
with these points in mind, we have : 

Hours. Per cent. 

1 — Standard moulding operations — Items 11, 14, 17, 29, 31, 

36, 37, 38, 39, 40, 48, 49, 50, 55, 56 and 58 6:19 54.3 

2 — Inefficiencies due to poor shop conditions — Items 1, 2, 12, 
13, 15, 16, 20, 30, 32, 33, 34, 35, 41, 42, 43, 44, 45, 46, 
47 and 57 2:06 18.1 

3 — Inefficiencies due to faulty planning — Items 3, 4, 5, 6, 7, 
8, 9, 10, 18, 19, 21, 22, 23, 24, 25, 26, 27, 28, 51, 52, 
53,54 2:12 19.0 

4 — Inefficiency of the moulder 1 : 02 8.6 

Totals 11: 39 100.0 

If we call the above inefficiency 100 per 
cent we will have the following : 

Hours. Per cent. Per cent. 
Inefficiencies due to poor shop conditions .... 2: 06 39 . 6 | 

Inefficiencies due to faulty planning 2:12 41.5 > 81.1 

Inefficiency due to the man 1 : 02 18.9 ) 

Total 5:20 100.0 



SCIENTIFIC FOUNDRY MANAGEMENT 177 

It follows from the above that through the 
elimination of the inefficiencies listed we 
would see the standard attained, so it is but 
natural to ask what this would mean in the 
way of results. The following summary of 
production and costs will show this aspect 
of the case clearly : 

As to Production: 

1 — If casting weighed 850 lb., the production 
per man per day for the 11.6 hours actual 
time would be 732 lb. 

2 — If same casting had been produced in 6.3 
hours (standard time), production per 
man per day would have been 1,349 lb. 

3 — Increase in productivity would have been . 617 lb. or 84.3 per cent. 

As to Cost: 

1 — Casting made in 11.6 hours would cost at 

40 cents per hour for Jennings and 

20 cents per hour for the helper, with a 

burden of 100 per cent $13 .92 

2 — If casting had been made in 6.3 hours, cost 

at the same rates would have been 7 . 56 

3— Reduction in cost $6.36 or 45.7 per cent. 

If, therefore, Jennings had been able to 
produce the 850-pound casting in the 6.3 
hours, not only would his productivity have 
been increased and the cost decreased as indi- 
cated, but the inefficiency in time (5.3 hours) 
could have been utilized in turning out more 
production— a clear gain — for using the same 
ratio per hour (134.9 pounds) this saved 
time would have meant 715 pounds in addi- 
tional tonnage or $21.45 in sales at $3.00 per 
100 pounds. 



178 MAXIMUM PRODUCTION 

While not acknowledging that this is in 
any way an isolated case, if it is possible to 
accomplish one-half of the results outlined, 
through "scientific management, ' ' then the 
thing to do is to get down to "brass tacks" 
and cut out the unscientific features. How? 

1 — Through a study and application of the 
efficiency principles that have been so con- 
vincingly defined by Harrington Emerson, in 
his recent series in The Engineering Maga- 
zine* 

2 — Through a systematic planning and 
dispatching of all work along the lines indi- 
cated in Chapter II. 

3 — Through a close study of the shop con- 
ditions in order that the delays due to this 
feature, contributing to inefficiency, may be 
eliminated or at least reduced to a minimum. 

4 — Through a careful and scientific study 
of all operations, in order that standards as 
to time may be determined which will not 
only serve to reveal the weaknesses in the 
conduct of the business but as the basis for 
reward for personal effort. 

5 — Through bonus reward to those who 
endeavor to take advantage of bettered con- 

* "The Twelve Principles of Efficiency"; The Engi- 
neering Magazine, May, 1910-September, 1911. Now re- 
published in book form. 



SCIENTIFIC FOUNDRY MANAGEMENT 179 

ditions and efficient planning, in proportion 
to their assistance in eliminating inefficiency. 
Scientific management? By all means, for 
it contributes to the betterment of efficiency; 
it aids in the attainment of an ideal; the 
profitable conduct of any undertaking, what- 
ever it may be. 



Chapter IX 

FOUNDKY OKGANIZATION AND MANAGE- 
MENT 

AFOUNDEY enterprise, considered as an 
organization, is in many respects like 
a chain, the strength of which is meas- 
ured by its weakest link ; and until the profit- 
eating elements — the inefficiencies — are dis- 
covered and eliminated, it cannot be expected 
to perform the impossible task of producing 
the results anticipated by its founders, any 
more than a chain can lift ten tons if one of 
the links, because of its weakness, is only 
strong enough to lift seven tons. To 
strengthen the links of a business — to make 
them work under a greater load — is the task 
which confronts every ambitious executive, 
and it cannot be done by concentrating atten- 
tion on one link or a few links ; all links must 
receive their proper consideration. 

The demand of the times is increased earn- 
ings; this involves a search for latent earning 
capacity — a search in every nook and corner 
for opportunities to better results, whether 
180 



FOUNDRY ORGANIZATION 181 

good or bad ; and this searching process must 
not be a haphazard, occasional, half-hearted 
affair, but a critical, systematized analysis 
all along the line. ' ' Chemistry of results ' ' is 
of vital importance, just as important to the 
success of the foundry as a business as 
" chemistry of iron" is to the melting opera- 
tion as a single department of the business, 
for it considers the important fact that pro- 
ductivity is the essential factor in the success 
of any foundry enterprise applicable to the 
methods in use, the clerks, the machines, the 
cupola, the cleaning room, as well as to the 
moulders and coremakers. Even a trifle of 
increase at each point will certainly result in 
greater earnings, for the little things, which 
are oftentimes overlooked because they are 
little, amount to something substantial in the 
aggregate. 

Analysis, important as it is, is a post-mor- 
tem, a tearing-to-pieces-looking-for-trouble 
process, and while it is an important element 
in pointing out the way to correct existing 
evils, it is just as necessary, as was pointed 
out in a previous chapter, to have at work an 
ante-mortem process — a process anticipative 
in nature — a creative and constructive force 
— a force which considers that all work, while 



182 MAXIMUM PRODUCTION 

distinct, must be subservient to a general 
scheme of things, which admits of something 
being done with regard to its relation to 
other things — "organization" in other words, 
applicable to the business in its entirety, to 
the various departments, to the clerical work, 
etc., and definable as follows: 

"The result of a resolving of the forces at 
work into their component parts; their clas- 
sification so as to enable them to follow well- 
defined channels, that the work may be guided 
along the most logical lines and responsi- 
bility placed where it properly belongs ; and 
finally their combination into one harmonious 
effort, supervised and directed by a master 
mind. ' ' 

A customer ordering castings will specify 
a certain analysis of the iron. He will want 
a certain percentage of silicon, sulphur, man- 
ganese, etc., and it is up to the foundry su- 
perintendent so to plan his work as to pro- 
duce castings which, when chemically ana- 
lyzed, will show how they fulfil the specifica- 
tion. In conducting your business, you spec- 
ify a certain analysis — profits; perhaps you 
specify the margin of profit that you require 
your final analysis to reveal to you, and you 
must organize your business so that this final 



FOUNDRY ORGANIZATION 183 

analysis will either come up to your desires 
or show you what was wrong in order for 
you to introduce the elements necessary to 
bring about the results you specified. There 
is no more excuse for a lack of organized 
effort in the foundry business than there 
would be for a foundryman to dump his 
different brands of pig iron, scrap irons, etc., 
onto one common pile. 

An accounting arrangement, no matter 
how carefully planned and installed, can only 
register results, not produce them, but this 
does not mean that the accounting should be 
considered as of little or secondary impor- 
tance; in fact, the forces which register or 
record the results, as well as those which 
produce them, must be well organized if 
maximum efficiency is to be the outcome. 
Let us therefore take up the matter of or- 
ganization, first as applied to the account 
ing and then to the engineering branches, 
by briefly considering the following ques- 
tions : 

1 — Should the cost accounting be consid- 
ered a part of the general accounting or be 
kept separate from it? 

2 — Should the accounting be on the basis 
of monthly, quarterly, or yearly results? 



184 MAXIMUM PRODUCTION 

3 — Should the inventory be a perpetual or 
continuous one or taken at regular periods 
for closing the books'? 

4 — Can mechanical aids be employed to 
advantage ? 

5 — What may be expected from an efficient 
accounting arrangement ? 

One of the basic principles about which 
a system of foundry accounting should be 
built, is that it should consider the important 
fact that business as it is now conducted is 
nothing more or less than a conversion of as- 
sets from one form into another. A foun- 
dryman starts with cash in the bank, which 
he converts into labor and material. From 
this expenditure he secures castings, which, 
when sold, appear as accounts receivable, 
then as cash, as payments are made, and 
back into labor and material again, from one 
state into another, in the form of a complete 
circle. 

From this point of view, a foundry ac- 
counting arrangement, to be efficient, 
should consider the costing as a part of the 
general accounting scheme, in order that all 
items affecting the business can be properly 
recorded and not lost sight of. Cost infor- 
mation carried through the general books so 



FOUNDRY ORGANIZATION - 185 

that everything must be in balance, at the 
end of a period is going to mean that the ac- 
counting will be more comprehensive than if 
the costing was a sort of spasmodic, hit-and- 
miss, incomplete and inaccurate sort of an 
affair. 

It would not seem as if question two was 
entitled to any consideration whatever. It 
is difficult to explain why an executive will 
rest content, as so many do, with anything 
short of a monthly accounting, making possi- 
ble a thirty-day statement as to his condi- 
tions. Cases are numerous, however, where 
a monthly trial balance and an annual or 
perhaps a semi-annual closing of the general 
books seems to be the custom. Twelve op- 
portunities in a year for locating and cor- 
recting faulty conditions, as against one or 
perhaps two chances, is something worth 
considering, as it places an executive in much 
closer touch with the various details of his 
business than a yearly accounting possibly 
could — in fact, in the majority of cases, if 
results are not as they should have been, it 
is almost impossible to analyze a yearly 
statement so as to lay a finger on the leaks 
and the inefficient conditions which were re- 
sponsible. As no manager in these days can 



186 MAXIMUM PRODUCTION 

afford to "fool" himself or to work in the 
dark regarding what is going on all about 
him, we are safe in concluding that a thirty- 
day accounting arrangement is absolutely es- 
sential. 

Eegarding question three, as to the matter 
of a continuous inventory, a brief considera- 
tion should show that such an institution is 
not only advisable, but necessary if the 
accounting scheme is arranged to make possi- 
ble a thirty-day statement. Material is con- 
verted money and should be regarded just as 
carefully as the cash is ; but how is this con- 
verted asset regarded by the majority of our 
foundries? Every reader can call to mind 
case after case where the proper care of the 
materials purchased is a matter of little 
concern; where careful attention is given to 
the matter of buying, but once the material 
arrives, this same careful attention seems to 
be conspicuous by its absence in so far as 
concerns the way this material is used. An 
item like torches and wicking does not seem 
to be of any great consequence, but how 
about the thousand and one items with which 
the foundry is concerned in the course of a 
year? Some workmen are careless by na- 
ture; others become so, even the most care- 



FOUNDRY ORGANIZATION 187 



ful, sometimes, when they realize that not 
only are there no safeguards thrown about 
the materials, but that it seems to be the 
duty of no one in particular to see to it that 
the materials are used judiciously. Even if a 
lax handling of the purchased materials does 
not result in making them careless, it tends 
to make them so ; and at the same time it robs 
the executive of the means that might enable 
him to "cut corners." A concern which had 
been rather liberal in allowing their work- 
men to use waste as they saw fit, decided to 
place the issuing on a more systematic basis, 
with the result that in the first month the 
consumption was reduced by about 25 pounds 
—a small item, perhaps, but an item which 
in a year meant 300 pounds less to pay for. 
No more material should be purchased and 
used than is necessary to produce good re- 
sults, and the less an executive has to pay 
for, the more he can use- in other directions. 
As the aim of a continuous inventory is to 
furnish the executive an efficient control of 
his materials, so that he can know that this 
expenditure is not out of proportion to the 
results obtained, it should need little argu- 
ment to convince a foundryman that purely 
from the standpoint of good business, of 



188 MAXIMUM PRODUCTION" 

possible financial gain, a positive knowledge 
of his material is something to be desired. 
Even if it did not save him a cent, he would 
at least know that because of this control of 
things he has not wasted any money. 

As to mechanical aids in accounting, I am 
of the firm belief that they can be used to 
decided advantage in any foundry office. 
What an executive wants is a knowledge of 
his results as quickly as they can be gotten 
to him, and if he is forced to depend upon 
his clerks to add columns of figures, multiply 
and divide, without the aid of mechanical de- 
vices, he must either employ a large force 
of clerks or wait for his information until 
it is too late to be of value. A progressive 
manager should do neither when an installa- 
tion of machines makes it possible not only 
to operate with a minimum number of clerks, 
but to secure his information on time. One 
of the most prominent manufacturers of 
adding and listing machines has a machine 
peculiarly adapted to the needs of the foun- 
dry business, in that pounds-hours-dollars 
can be added at one time, materially reduc- 
ing the work of summarizing production costs 
according to the various classifications. 
There are several makes of multiplying and 



FOUNDRY ORGANIZATION" 189 

dividing machines, any one of which will pay 
for itself within a short time, as they not 
only make the work easier for the clerks, but 
enable them to do their work with much more 
rapidity — the most important result being 
the absolute accuracy with which the ma- 
chine can be made to operate. 

As to what may be expected from a com- 
prehensive accounting arrangement, it can be 
said that the principal result would be clear 
and concise statements reflecting the condi- 
tions of the business. Not very high sound- 
ing, perhaps, but full of meat just the same. 
A hospital doctor arranges for information 
concerning his patients during his absence, 
and at regular intervals the nurses and at- 
tendants register in a systematic way the im- 
portant details concerning pulse, tempera- 
ture, etc., which, upon the arrival of the 
physician, will show him the condition of the 
patients during the time he was away from 
the hospital. He knows whether they are 
better or worse, and from this information, 
plus his knowledge of the cases, he is in a po- 
sition to plan out his future action. A manu- 
facturer is the doctor of his own business, his 
statements and charts being the information 
as to pulse, temperature, etc., a study of 



190 MAXIMUM PRODUCTION 

which will enable him to plan for the future. 
Figures in themselves are dry and uninter- 
esting, but with reason and judgment (analy- 
sis) applied to them they assume a far dif- 
ferent aspect. To illustrate. A correct ac- 
counting scheme would show what the total 
production was in a certain period and it 
would also show the number of hours in 
which this production was made. Placed by 
itself, this information would mean very little 
to the executive beyond the fact that his 
plant worked a certain number of hours and 
that his production was a certain amount. If, 
however, these figures should show, in addi- 
tion, that this production in the time speci- 
fied meant 500 pounds per man per day, the 
executive would have something in the way 
of valuable information, for, by comparing 
this figure with the relative production per 
man for previous months, he could satisfy 
himself from his knowledge of the work, as 
to whether the result was satisfactory or not. 
Analyzing still further, he could get the rela- 
tive production of the work for Jones, Smith, 
and Brown, and would perhaps find that on 
the work for Brown the production fell below 
what it should have been. It is fair to as- 
sume that by concentrating his attention on 



FOUNDRY ORGANIZATION" 191 

the production of Brown he would be able 
to increase it to some extent, any increase 
being accompanied by decrease in the cost 
to produce the work, consequently more 
profit — this added profit being the result of 
an arrangement which reflected the condition 
of only one feature of the business. There 
are many other possibilities in this reflection 
process, but the one given is sufficient for 
purposes of illustration. At any rate, from 
the above arguments we can decide in favor 
of an accounting arrangement which will not 
only be accurate and efficient, but designed 
to show the pertinent details of the business 
in a simple yet comprehensive manner. 

Efficiency is the elimination of inefficiency 
— once it is found. It therefore becomes the 
duty of the executive so to arrange his details 
as to allow this "finding" process to work 
to advantage, which can best be done through 
means of a correct and well balanced organ- 
ization. Human nature is liable to pass over 
the possibilities for profit when some one else 
is likely to receive credit for the good that is 
done, but once put a responsibility squarely 
up to an employee, letting him understand 
that while he will be held strictly responsible 
for failure, he will receive credit for accom- 



192 



MAXIMUM PRODUCTION 



Office Manager 



GENERAL 
MANAGER" 



,_ Accounting ("Geueral 

Orders "-Cost 

Purchasing 
— Receiving 

Stores keeping and isanlng 

Shipping 



— Office clerical 



-Time report* 



— r-J 

Shop clerical — 

•—Production data 

Placing cars 

Unloading, stacking and piling 
Loading shipments 
- -Stable 
Teaming 
—Handling materials about yard 
Cleaning up around yard 
-Advising as to condition 
of materials in yard 

Foundry Foreman see chart "B" 



SUPEBINTENDENT- 



-Power 

-Pattern shop-f^ 
Departments- -Carpenter shop 



Additions and Maintenance 
-improvements of plant 
to the plant 

i — Estimates 



-Machine shop 
^Blacksmith shop 



r-Laring ont 
patterns and 
core boxes 

-Checking same 

-Delivering to 
the foundry 
and core room. 



Sales Manages 



Advertising 
-Traveling 

Sales correspondence 
Prices 
—Commissions 
Allowances 



tTuBttglnttrlng HKQathtr 



FIG. 23. GENERAL ORGANIZATION OF THE FOUNDRY. 



plishment, and from that moment better re- 
sults may be hoped for. In other words, the 
incentive to do must be furnished, for there 
is nothing that will do more to create liar- 



FOUNDRY ORGANIZATION 



193 



mony and promote action than mutual trust. 
Nonconformists must, of course, be weeded 
out or swung into line, for there can be no 
successful business without authority. This 
can be accomplished through the force of or- 
ganization and personality much more easily 
than it can be by the force of fists. Men 





— Moulding 






— Coremaking 


—Getting cupola and ladles In readiness 






— Analysis 
—Charging materials 








—Taking off heat 




— Night gang 

• 


—Rattling 




-Cleaning — 


-Chipping 
—Sand blast 


FOUNDRY_ 

Foreman 


—Inspection 










i— Cleaning up > 






—General shop labor - 


\— Pouring off 
—Shaking out 
—General labor about foundry 






—Rigging 








— Requisitioning 
Supplies 


— Miscellaneous materials 

— Cores 






— Shop Carrying 


—Flasks f To moulders 

L From moulders 

— Patterns -T To m °nlders 

T-From moulders -f To P attern sU> ™S° 

L To pattern shop for repairs 














Laying out work for moulders for next day 






— Advance work _ — 


— Getting flasks in readiness for new work 




Ass 


istant Foremen 


— Keeping moulders supplied with sancLgaggers and clamps, 
— Getting special rigging in readiness for use by moulders 






The Engineering Magazine 



FIG. 24. ORGANIZATION OF WORK UNDER THE FOUNDRY 
FOREMAN, 



194 MAXIMUM PRODUCTION 

cannot be made to do a tiling, but they can be 
led. The employee owes a duty to his em- 
ployer, to be sure, but this does not mean 
that this duty is all one-sided. Make the or- 
ganization what it should be — place re- 
sponsibility where it properly belongs — fur- 
nish a man with an incentive to look for the 
troubles which exist to a greater or less de- 
gree in every business, and the inefficiency 
will be brought to light, for efforts will be 
made to bring about increased productivity, 
and increased productivity is synonymous 
with increased efficiency. 

Authority should be carefully defined and 
then centralized along the lines suggested in 
this chapter ; a list of duties patterned after 
the outline in Chapter II should be drawn 
up ; criticism and recommendations for bet- 
terments should be solicited and acted upon ; 
the details of the business should be studied, 
analyzed and standardized; attainable per- 
formance should be set, against which accom- 
plishment can be measured, and once those 
connected with the organization can feel that 
their opinion is desired in matters affecting 
their own work, it will not be long before 
they will be on the lookout, all along the line, 
for the loose ends, the leaks, the inefficien- 



FOUNDRY ORGANIZATION 195 

cies; and as a man looking for trouble is 
sure to find it, so will the man looking for 
places which can be bettered be better able 
to locate them than he who goes about with 
his eyes closed, especially if discovery carries 
with it a monetary reward, which would talk 
louder than mere praise could ever hope to. 



Chapter X 
FOUNDRY PRODUCTION AND ITS DETAILS 

A PEOMINENT foundryman recently 
^ ^ told me that in the plant in which he 
is employed, elaborate accounting methods 
were devised and installed (at no small cost) 
and an elaborate force organized to compile 
accurate and detailed cost data (also at no 
small cost). He stated that results were 
made known so long after the performances 
covered by the records that it was simply an 
impossibility for him or any one else to point 
out reasons for certain fluctuations in costs ; 
and that as a matter of fact, he knew more 
about what was going on before the introduc- 
tion of the methods than he did after their 
installation. If this is not paving the way 
for a long string of excuses, enabling those 
responsible for inefficiencies to hide behind 
the much used ' ' I don 't know, ' ' then it would 
be a difficult task to ascertain what would be. 
As has been stated before in these pages, 
an accounting arrangement is a recording 
196 



FOUNDRY PRODUCTION 197 

agency, not a producing agency, and if this 
recording is not a reflex of the existing con- 
ditions, then how can it be expected that one 
or a few men will know what caused this and 
what caused that? At any rate, a close study 
has convinced me that accounting schemes 
fall down because of the many things the cost 
statistics do NOT show. Without question- 
ing the theory of accounting, without doubt- 
ing the accuracy of the recorded data, we 
must all agree that any system of records 
should show where the faults are, enabling 
the executive to go to his management with 
facts explaining the figures, instead of ask- 
ing them to explain the figures by substitut- 
ing the facts; which, by the way, are most 
elusive. 

The principal element in the foundry busi- 
ness is its production, and it has been a 
source of wonder to me why the details of 
this production have not been analyzed to see 
if they could be made to submit to some sort 
of uniform procedure, instead of something 
which could be viewed about as one pleased. 
It therefore seems advisable to take up the 
discussion of production details in an en- 
deavor to make this recording a constructive 
as well as an analytical force. 



198 MAXIMUM PRODUCTION" 

Commekcial Production. — This element 
should comprise all castings made for sale 
to outside foundries, or to the company of 
which the foundry is a part, or to both, and 
should represent the net good castings pro- 
duced in a period, with no deductions made 
for whatever may be returned on account of 
error, defect, or other reasons. In other 
words, the total castings produced in a 
period, less the bad castings of the same 
period, is the production. This may sound 
strange to a great many, but as I have found 
that the practice of several foundrymen has 
been to deduct from the current production 
whatever has been returned as defective, it 
seems advisable to outline what seems to be 
the correct procedure. 

In the first place, what is produced is pro- 
duced regardless of any outside considera- 
tion; and the rule should be that after cast- 
ings are cleaned, carefully inspected, passed 
and shipped, they form a part of the pro- 
duction and are subject to no deductions 
whatever for returns from the outside. In 
proof of this, let us assume that in a given 
period, 500,000 pounds or 250 tons of cast- 
ings have been produced by the foundry, cost- 
ing $12,500, and that the customers in the 



FOUNDRY PRODUCTION 199 

same period have returned 50,000 pounds of 
defective castings, which have been billed 
back at a price of $50.00 per ton, or $1,250. 
Assuming that the market value of scrap is 
$15 per ton, these returned castings are 
worth $375 to the foundry, leaving a balance 
of $875, which the foundry must absorb. If 
we increase the cost and decrease the ton- 
nage, the cost per ton is greater (on account 
of the decreased divisor) than it would be if 
we simply increased the cost and allowed 
the tonnage to remain as it stood. 

The following figures will clearly show just 
what is meant: 

A — Production reduced by returns: 

Cost of 250 tons $12,500 

Cost of returns: 

Price $1,250 

Scrap 375 

To expense 875 

Total cost $13,375 

Cost per ton of the 225 tons 

(250 — 25) $59.44 

B — Production not affected by returns: 

Cost of the 250 tons $12,500 

Cost of returns (see above) . 875 

Total cost $13,375 

Cost per ton of the 250 tons. . 53.50 

Difference in cost per ton $5.94 



200 MAXIMUM PRODUCTION 

It is evident that if method "A" is incor- 
rect bnt in use, the results are certainly go- 
ing to be misleading, for no foundryman 
wants to use a cost of $59.44 in estimating if 
$53.50 is the correct figure. Assume that in 
the period during which 250 tons are pro- 
duced no sales are made. The castings are 
piled in the storeroom ready for delivery, 
when along comes the 25 tons of defective 
castings, and, as a result, we proceed to ad- 
just our figures so as to read 225 tons pro- 
duced at a cost of $13,375, or $59.44 per ton. 
Should we decide to take an inventory on the 
first of the succeeding period, we should find 
that we had 250 tons of castings on hand. 
Our book, however, would show %25 tons of 
castings, and as their value, according to the 
accounting, is $59.44 per ton, we would natu- 
rally have to inventory 225 tons of castings 
at $59.44 per ton, making $13,375, and haul 
in 25 tons of castings from nowhere, at no 
value whatever — decidedly what the foun- 
dryman would not do. If, however, he in- 
ventoried 250 tons of castings at the rate 
$59.44, the valuation would be $14,860, or 
$1,485 more than the production cost — which 
would still be incorrect. If he had charged 
25 tons of scrap to the scrap account at $375, 



FOUNDRY PRODUCTION 201 

and $875 to his current producing cost and 
left his production alone, his result would be 
250 tons at $53.50 per ton, making a valua- 
tion of $13,375. In case the practice in any 
particular foundry is to reduce current pro- 
duction figures by defectives returned, it 
should be discontinued as the above discus- 
sion should show its incorrectness. 

Wokking Conditions. — The next consid- 
eration is the conditions under which the 
work in a foundry is usually made, which, as 
every f oundryman will be able to appreciate, 
directly influence cost of production. A job 
may be made in an iron flask or in a wood 
flask that may have seen better days ; it may 
be made in a flask of suitable size, or a flask 
may be used considerably larger than the 
work calls for. The pattern may be a mere 
skeleton which must be built up by the 
moulder before he can commence his mould- 
ing, or it may be a regular pattern, doing 
away with this extra work, or the pattern 
may be in the form of a sweep. One piece 
may be made in the flask, although it is just 
as likely that several pieces will be made in 
the same flask. The flask may consist of a 
cope and drag, or the drag may be dispensed 
with and the work made in a pit with a cope, 



202 MAXIMUM PRODUCTION 

or perhaps the cope and drag are both dis- 
pensed with and the work is made in a pit 
with loam plates for a covering, while for 
certain work we may see flasks consisting of 
drag, check, and cope. It may be that on 
certain occasions work is made on moulding 
machines, but because of congestion at the 
machines, is made on other occasions by 
hand. The work may be bedded in a pit or 
in a drag, or it may be rolled as when copes 
and drags are used. One time the work may 
be made in green sand, another time the de- 
cision will be to skin-dry the mould, or per- 
haps the order will be to make a dry-sand 
mould. Loam and sweep work also enters 
into the consideration as regards cost. 

From the above it can easily be seen how 
difficult it is to comprehend what a cost 
really means, unless some information as re- 
gards the working conditions is at hand ; for 
in a shop of any size, having quite a variety 
of work, it is safe to gamble dollars to pen- 
nies that, after a period of a few weeks, no 
one can tell with any degree of positiveness 
exactly how the work was made or what 
really caused certain fluctuations in cost. To 
get this feature down to a basis that will 
admit of the working conditions being an 



FOUNDRY PRODUCTION 203 

open book at all times, the following classifi- 
cation can be nsed to advantage in correctly 
defining how a piece of work was made — the 
prefixed letters being the designating sym- 
bols of the various conditions: 
Method or Moulding — 
G — Green Sand. 
S^-Skin Dry. 
D— Dry Sand. 
L — Loam. 
Kind of Moulding — 
B— Bedded. 
S— Swept. 
E— Rolled. 
How Made — 
M — Machine. 
H— Hand. 
Rigging — 

C — Cope only. 
DC — Drag and Cope. 
DCC — Drag, Check and Cope. 
LP — Loam Plates. 
Pattern — 

R — Regular. 
SK— Skeleton. 
S — Sweep. 

t .—Patterns to Gate. (Use correct 
- numeral.) 



204 maximum production 

Flask — 

M— Metal. 
W— Wood. 

. . — Size. (List dimensions.) 
If, for instance, a mould was made in dry 
sand ; was rolled ; made by hand ; a cope and 
drag used; the work made from a regular 
pattern, two patterns to the gate; in an iron 
flask 5 feet by 3 feet by 2 feet 6 inches in 
size, the symbol would read : 

DEH— DC— E2— M, 5X3X2-6, 
which would give any one investigating the 
record a year from the time it was made, the 
exact facts in the case. 

Delays. — Another feature which has never 
received a fraction of the attention it is en- 
titled to is the matter of delays in the foun- 
dry, which are usually buried so deep in the 
cost figures as to be beyond all possibility of 
uncovering. Because of this, I am of the 
firm opinion that the usual foundry account- 
ing data cannot be anything else than ineffi- 
cient, because of the lack of clear and intel- 
ligible comparative evidence. 

A moulder gets a job, we will say, and it 
takes him 24 hours to make it. According 
to current practice, the moulding cost is 
$9.60, if the man receives 40 cents per hour. 



FOUNDRY PRODUCTION 205 

Is this the correct cost? A moulder is hired 
to make moulds — not hired to do a great 
many things that he is oftentimes forced to 
do, which in nearly every instance net the 
company absolutely nothing. If then in the 
24 hours just mentioned, the moulder in 
question had lost any time for causes over 
which he had no control — causes which care- 
ful management could no doubt eliminate, 
then the facts with their reasons should be 
properly recorded and classified, for it is fair 
to neither the work nor the job to tax it with 
what Mr. Emerson so aptly styles "prevent- 
able waste." 

A point which seems curiously difficult to 
bring to the understanding of managers ac- 
customed only to "old-line methods' ' is that 
a large part of the gain obtained by efficiency 
methods comes from the elimination of these 
wastes. The skeptic as to "scientific man- 
agement" has before his mind only the con- 
ception of driving men to higher physical 
exertion. Efficiency methods, by reducing 
needless wear and friction, make the work- 
man's task lighter instead of heavier. Ac- 
tual acceleration of the workman's motion is 
the smallest part of the whole plan. Stimu- 
lative wage systems are the final step, and 



206 MAXIMUM PRODUCTION 

the least important as to exact method in de- 
tail. Let us assume that the following is a 
time analysis of the job in question: 

Number of Operation. Elapsed Time. 

Operation. Hrs. Min. 

1 Getting sand in condition to 

start work 40 ( * ) 

2 Waiting on bottom board and 

drag 15 (*) 

3 Waiting on pattern 25 (*) 

4 Placing bottom board and pattern . . 15 

5 Placing drag 10 

6 Eamming the drag 3 30 

7 Waiting on crane to roll drag 25 (*) 

8 Polling drag over 10 

9 Making joint 30 

10 Placing cope section of pattern. . 10 

11 Waiting for cope 20 (*) 

12 Carpenters barring and chucking 

cope to suit the pattern 1 25 (*) 

13 Placing cope 15 

14 Setting gaggers 1 00 

15 Eamming cope 4 00 

16 Waiting on crane to lift off cope. 1 00 (*) 

17 Lifting off cope 20 

18 Drawing pattern drag side 30 

19 Drawing pattern cope side 40 

20 Finishing drag 2 00 

21 Finishing cope 2 30 

22 Waiting on cores 30(*) 

23 Coring up mould 2 10 

24 Closing mould 20 

25 Clamping and weighting 30 

Total elapsed time on mould. . 24 00 



FOUNDRY PRODUCTION 207 

A study of this analysis reveals the fact 
that on starting the job in the morning the 
moulder had to spend 40 minutes in cutting 
over his sand and getting it in condition for 
using. It then develops that he loses 15 min- 
utes waiting for the laboring gang to bring 
his bottom board and drag, after which, be- 
cause of some delay in the pattern shop, he 
is made to wait 25 minutes for his pattern. 
He then starts work and all goes well until 
he is ready to roll over his drag, when he 
is forced to wait 25 minutes on account of 
the crane being in use elsewhere. After he 
rolls the drag and makes the joint, the next 
delay is 20 minutes, waiting for the cope to 
be brought to his floor. It is then found 
necessary to reset and chuck the bars of the 
cope, so that it will suit the pattern that is 
being made, this taking 1 hour 25 minutes. 
He then works for 5 hours 15 minutes, plac- 
ing his cope, setting the gaggers and ram- 
ming, and when ready to lift off, so as to be- 
gin the finishing of the mould, finds that the 
crane is in use by some of the other moulders 
and that before he gets it one hour has 
elapsed. Things go along nicely until he is 
ready to core up, but because of the cores 
being not quite ready, he is forced to wait 40 



208 MAXIMUM PRODUCTION 

minutes. Listing these delays and their 
length in minutes, we have: 

Hrs.Min. 

Operation No. 1 — Getting sand in condi- 
tion to start work 40 

Operation No. 2 — Waiting on bottom 

board and drag 15 

Operation No. 3 — Waiting on pattern 25 

Operation No. 7 — Waiting on crane to 

roll drag 25 

Operation No. 11 — Waiting for cope 20 

Operation No. 12 — Barring and chucking 

cope 1 25 

Operation No. 16 — Waiting on crane to 
lift off cope 1 00 

Operation No. 22 — Waiting on cores 30 

Total time in delays 5 00 

As a result we find that in the 24 hours 
the moulder spent only 19 hours on work that 
can rightly be classed as "moulding," and 5 
hours in delays — a clear waste, or at least 
the greater part of it. Assuming that in the 
19 hours the man worked he did all that could 
be asked of him, then the ratio between the 
total elapsed time and the actual moulding 
time of 19 hours, is 78.5 per cent, conse- 
quently the loss or inefficiency of 5 hours is 
21.5 per cent. If, however, the job had been 
standardized as a 15-hour job, then the effi- 



FOUNDRY PRODUCTION 209 

ciency would be but 62.5 per cent and the in- 
efficiency of 37.5 per cent divided as follows : 

Fault of the moulder 16.0 per cent. 

Fault of the management 21.5 per cent. 

If, however, the cost of the work is com- 
piled on the basis of the 24 hours (as it no 
doubt would be) and is noticed on account 
of the length of time that was taken, we are 
virtually charging the inefficiency to the 
moulder, for after the costs are compiled, 
ivho in the place knows anything at all about 
the delays on this particular job f The re- 
sult is that the management attaches abso- 
lutely no blame to itself ; the inefficiencies are 
lost sight of and the cost record filed away 
after the customary — " don't let it happen 
again.' ' A statement of this kind, in the 
absence of pointing out any specific happen- 
ing whose recurrence it is expected to avoid, 
is like asking a child to pick up something it 
did not drop. 

Men should be encouraged to report de- 
lays that are preventable or for which they 
are not to blame, in order that they may be 
properly classified so as to force action in 
the direction of bettering conditions to elimi- 
nate the majority of delays that are usually 



210 MAXIMUM PRODUCTION" 

met with in the foundry, which can be elimi- 
nated if the proposition is approached in 
the right spirit. 

Productivity. — It is essential in any un- 
dertaking to know as much as possible about 
what is being accomplished, but it is equally 
important to have this knowledge condensed 
in as brief a form as will correctly convey the 
desired information. In the foundry busi- 
ness we deal to quite an extent with weight, 
and because of this fact the tendency has 
been, and is now, to indulge in too much con- 
sideration of " tonnage.' ' Tons, tons, and 
more tons is the eternal cry; consequently, 
who can blame the usual shop management 
because it suffers from " failing memory" as 
regards light stuff which cuts such a small 
figure in increasing tonnage; because it 
crowds work oftentimes regardless of cost; 
because it puts five or six men ramming a 
cope, in order to get the job out with a rush, 
when two men or three at the outside could 
work to decidedly better advantage ? Not the 
management, but the wrong ideal set before 
the management, is to blame for these things. 

Many an executive is perfectly satisfied 
when his statement shows a high tonnage, 
for the reason that it is usually accompanied 



FOUNDRY PRODUCTION 211 

by a low relative cost, and, as a result, it is 
considered that the attainment is up to the 
mark. It may sound very, very strange, but 
it is this one feeling of satisfaction over high 
tonnage that has proven such a stumbling 
block in the wag of attaining the highest ef- 
ficiency in the foundry. A large tonnage be- 
cause it is large is in itself a direct factor in 
bringing about a reduction in cost, often- 
times regardless of any other consideration, 
and because of this fact it is a very easy mat- 
ter for inefficiencies to be lost sight of. Men 
may be working to disadvantage; the plan- 
ning of the work may not be all that it should 
be; materials may be used recklessly; rig- 
ging may be used without much regard to 
its adaptability to the work; and yet "when 
the returns are all in," a high tonnage at a 
low cost overshadows the defects in the exist- 
ing scheme of things. Eeflection should 
show that it is possible for an inefficient shop 
to do a business at a profit so long as its ton- 
nage can be kept above a certain figure, but 
once let it drop below the balancing point 
and an investigation of the inefficiencies is 
immediately in order. The trouble is that 
there is too much consideration given to fig- 
ures in the aggregate — the final results ; and, 



212 MAXIMUM PRODUCTION" 

as was pointed out in a preceding chapter, 
the usual study of things begins at the 
wrong end — the top instead of the bottom. 

To reverse the usual order of things, to be 
in possession of knowledge in condensed 
form, that will show how things are progress- 
ing, it is necessary to decide upon some unit 
that will convey more meaning than is 
usually conveyed by the final tonnage and 
cost statements. The law of cause and effect 
may help us. Production is the result of the 
work of the men who make it. Why not 
hitch the two elements together — the pro- 
duction in pounds and the work of the men 
in time, calling the ratio that it is thus possi- 
ble to ascertain, productivity — which would 
mean the relative amount produced in a 
given time? This would seem a logical unit 
for two reasons: 

1 — Because the amount that a man pro- 
duces in a given time is the basic factor de- 
termining the cost of what he produces. 

2 — Because it furnishes a unit of compari- 
son as regards accomplishment. 

The importance of the first reason will be 
appreciated upon consideration of the exam- 
ple given on the following page : 



foundry production 213 

Example Showing Influence of Productivity 

on Cost 

Case A. B. 

Weight of casting 250 lb. 250 lb. 

Produced in given time (ten 

hours) 1,000 " 1,500 " 

Labor rate per hour $0.30 $0.30 

Cost of the total amount pro- 
duced in the ten hours 3.00 3.00 

Cost of the total amount pro- 
duced per 100 lb 30 .20 

Cost of the 250-lb. casting 
then becomes .75 .50 

Note. — For a further discussion of productivity see chapter 13, on "The 
Importance of Correct Burden Apportionment." 

As regards the second reason. Assuming 
the casting in cases A and B to be from the 
same pattern, it is evident that in the same 
length of time, the production at B was in- 
creased 50 per cent over that shown at A, 
consequently the man who made the six cast- 
ings is a better workman than the one who 
made the four castings ; or, if the same man 
made the work, his productivity was better 
in one instance than in the other. Our unit 
of productivity takes into account the impor- 
tance of both 1 and 2, whether the test is 
applied to a single casting, a group of cast- 
ings, a division of the production, or the to- 
tal amount produced. 

The unit can best be expressed in terms of 



214 MAXIMUM PRODUCTION 

pounds produced daily and the rule would 
be: 

M = Hours of moulding. 
W = Weight of casting in pounds. 
H = Hours to the working day. 
P = Productivity. 
W 

— X H = P. 
M 
Some attempt has been made in a number 
of foundries to use this unit in getting at 
facts concerning production, but it has been 
found that a decided difference of opinion 
exists concerning the elements making up the 
unit. The time element has been found in 
certain cases to be : 

1 — The hours of moulders only, disregard- 
ing special laborers working as moulders, ap- 
prentices, and laborers directly assisting the 
moulders. 

2 — The hours of moulders, special labor- 
ers working as moulders, apprentices, and 
laborers directly assisting moulders. 

3 — The hours of moulders, special laborers 
and apprentices (laborers not included). 

4 — The hours of moulders and coremakers 
because their time is considered a part of 
Direct Labor. 



FOUNDRY PRODUCTION 215 

It naturally follows that each one of the 
four elements, if used, will give different re- 
sults. One foundryman using No. 1 will tell 
another who may be using No. 4 that he is 
producing 1,000 pounds per man per day, 
and the second will say that he is getting 800 
pounds per man per day. Both may be pro- 
ducing about the same amount, but the dif- 
ference in the element used seems to make 
the practice of one foundryman much better 
than that of the other. If consideration is 
given to No. 1, it will be found that the rela- 
tive expression of productivity is not abso- 
lutely correct; for, while the moulders may 
be producing a certain amount, others have 
assisted the moulders to a greater or less de- 
gree in turning out the production, and the 
time of this assistance is as much a part of 
the producing time as that of the moulders 
themselves. As for No. 4, it will be appar- 
ent upon consideration that coremakers do 
not influence production as far as the core 
labor is concerned. The core setting by the 
moulders is, of course, a part of the produc- 
ing time, the result of which is castings. 
Core labor, however, produces nothing of a 
tangible nature, and, as the aim of our unit 
is to get at the relation between what is pro- 



216 MAXIMUM PRODUCTION 

duced and the time in which it is produced, it 
seems reasonable to exclude the time of core- 
makers from our consideration of produc- 
tivity. This leaves No. 2 and No. 3, either of 
which can be used, depending upon the policy 
in any certain shop, the procedure being as 
follows : 

1 — If the policy is to assign a laborer as a 
regular assistant to the moulder, then the 
time element should include the time of the 
laborer. 

2 — If, however, the gang of laborers is a 
floating body, their time can be left out of 
the consideration. 

It may be well to state in connection, that 
while the terms productivity and efficiency 
are in a sense synonymous, the above re- 
marks on productivity must not be construed 
as meaning that considerations of efficiency 
are to be relegated to the rear. Efficiency, 
as was pointed out in a preceding chapter, 
is the ratio existing between the estimated 
or possible performance and the actual at- 
tainment. A standard producing time 
against the actual producing time ; the possi- 
ble production against the actual weight 
produced, will give the relative degree of 
efficiency as to time or weight. The pro- 



FOUNDRY PRODUCTION 217 

ductivity ratio, however, considers actual at- 
tainments only, and merges two different ele- 
ments — production and time — instead of the 
same elements, so while there may seem a 
sameness in the terms, there is, after all, a 
difference in the two units of comparison. 

Average Weight of Castings. — Another 
unit which can be used to advantage takes 
consideration of the average weight of what 
is produced in a given period, and this can 
be employed with special reference to pro- 
ductivity. We sometimes hear that the 
reason for a high cost of production is the 
light work made, or if the cost is a low one, 
heavy work is given as the reason. The fol- 
lowing rule will therefore give some infor- 
mation which may prove of value : 

W = Weight of the castings produced 

(in total or by classes). 
N = The number of pieces made. 
A — The average weight per piece. 
W 

— -A 

N 

It is a good thing to know that in a certain 

period of time the productivity was 800 

pounds per man per day, while in another 

it was 1,000 pounds per man per day, but if 



218 MAXIMUM PRODUCTION 

it was found that in the first period the aver- 
age weight of the castings was 800 ponnds 
and in the second period 500 pounds, our in- 
formation, which would naturally include a 
knowledge of the class of the work made, 
would be much more complete. 

Classification of Production. — A general 
policy of classifying production should be 
adopted, as outlined in the concluding 
chapter — "Cost Apportionment in Various 
Classes of Foundries." To each one of the 
classes, a symbol should be given for use in 
charging and identifying them. I doubt very 
much if it is advisable, except in extreme 
cases, to classify according to the individual 
pattern, as this makes the costing altogether 
too elaborate and cumbersome, but I do be- 
lieve in classifying by main classes having a 
limited number of subdivisions, with a 
proper provision for getting the production 
cost of any particular patterns if desired. 



Chapter XI 

EFFICIENT DISPATCHING IN THE 
FOUNDKY 

TJABADOXICAL as it may seem, many 
-* apparently unimportant things are 
found in the end to be vastly import- 
ant. Under the heading, " delays,' ' in the 
preceding chapter, it was found that the 
waste of five hours of the twenty-four spent 
on the job in question was due to causes 
most of which could have been eliminated. 
No one would accuse the management of this 
shop of deliberately forcing the five hours 
of waste time on the moulder who made the 
work. If not the result of deliberation, the 
waste must have resulted from carelessness, 
faulty conditions, or other reasons. It seems 
certain it could not have been considered of 
the utmost importance, or steps would have 
been taken which would have resulted in the 
wasted hours not appearing in the list. 

What, then, was the trouble! It can no 
doubt be said for this particular shop man- 
219 



220 MAXIMUM PRODUCTION 

agement that it was probably doing the best 
it could to run things economically, accord- 
ing to the generally accepted conception of 
what constitutes the best one can do; it was 
probably holding its own with other foun- 
dries in turning out castings of good quality 
in point of material and workmanship; it 
was no doubt ambitious to get castings made 
as quickly as possible; it probably felt a 
"fall down" as keenly as you or I would feel 
it ; it no doubt possessed as good a technical 
knowledge of the foundry business as would 
be found in other shops. Yet, in spite of all 
this, the illustration cited shows very forci- 
bly that something must have been decidedly 
wrong — something that would justify a care- 
ful analysis as to underlying causes, with an 
outline of a more efficient procedure — the 
purpose of this paper. 

Did you ever see a bird, in its search for 
twigs, straw and the like? Hunting these 
things for fun? Hardly. It is simply plan- 
ning ahead against the time when a warm, 
comfortable nest will be wanted for the little 
ones to come. It does not wait until they 
have arrived — the bird sees to it that the 
nest is ready before it will be needed, and, as 
a result, we call it a wise bird. 



EFFICIENT DISPATCHING IN THE FOUNDRY 221 

Watch a sprinter. He does not depend 
altogether npon his speed to carry him over 
the course. His whole aim is centered on the 
start — the dash at the crack of pistol. Even 
to the long-distance rnnner the start is of 
moment — he thinks ahead. Would he run 
his head off at the beginning? Not if he 
knew the racing game as an expert knows it. 
His start would consider conserving his en- 
ergies for the contest before him. He would 
even let others pass him, secure in the belief 
that the finish would take care of itself if 
the start was one that did not make too many 
inroads upon his vitality before he got his 
"second wind." 

These illustrations point out a lesson 
worthy of attention, for they show conclus- 
ively the importance of the prepared stated — 
the value of the start. Eesults, whether in 
life or in business, depend largely upon this 
start, and because this is so, industrial en- 
deavor has suffered much from failing to give 
proper attention to a definite plan of pro- 
cedure. 

This, then, is a cause of the trouble that 
we started to find. If the work had been 
made to submit to a definite plan of pro- 
cedure, the start would have received its 



222 MAXIMUM PRODUCTION 

share of attention — as much attention as the 
work itself, if not more. Not only is this 
general neglect of the start largely to blame 
for inefficiency, but the spirit of things is 
usually impulsive rather than methodical. 
i 'Get the thing done," is the order, and the 
procedure becomes one of a rush, hustle, 
tear-things-to-pieces kind, in a mad effort to 
obey orders, regardless of whether or not 
these orders could have been obeyed to bet- 
ter advantage some other way. 

As a test, it would be well to try the fol- 
lowing : In the first place, size up the situa- 
tion generally as regards work under way, 
orders ahead, etc., and after the noon 
hour, call in the shop foreman, the core- 
room foreman, the flask boss, the flask 
carpenter, the man in charge of the 
pattern storage, the labor boss, and the 
pattern-shop foreman. In a general way tell 
them that the purpose of the meeting is to 
line up the procedure for the next day and 
perhaps the day following, and that each one 
will be expected to outline his share of the 
work. Be prepared to list the procedure as 
it is outlined. Have before you a list of the 
moulders, and begin by asking the shop fore- 
man what he proposes giving each of his 



EFFICIENT DISPATCHING IN THE FOUNDRY 223 

men on the list, for next day. Also inquire 
what they will start on after the work just 
mentioned has been made. Ask the foreman 
for his ideas as to the time the jobs men- 
tioned will probably take. If two jobs are 
not sufficient for the day, get him to assign 
enough work to cover the man's time fully. 

Now get your core-room foreman to advise 
you what cores he has made or is going to 
make for the next day's work. Ascertain if 
the pattern-storage man can tell you what 
patterns he has laid out or is going to lay 
out for the work on the following day, and 
then quietly ask the labor boss what rigging 
in the way of flasks, plates, etc., he is plan- 
ning to bring in for the work to be made in 
the next few days. See if the flask boss can 
tell you what he is doing towards getting 
flasks ready for the next day's work, and then 
ask the flask carpenter what flasks he is 
working on, or what he expects to work on 
to accommodate the new work coming in. 
Find out what patterns the pattern-shop 
foreman is getting ready for the shop. Other 
questions will suggest themselves as you go 
along, which you can put to those interested. 

After each one has had an opportunity to 
outline his share of the procedure, dismiss 



224 MAXIMUM PRODUCTION 

the meeting and study carefully what you 
have before you. Also arrange on the fol- 
lowing day to check up the shop operations 
to see how closely the outline of the preced- 
ing day is being lived up to by each one in- 
terested. Note the waits, delays, changes in 
plans, etc. If the results prove surprising, 
both in the meeting and the procedure on 
the day following; if you find that the "all 
pull together ' ' spirit is conspicuous by its ab- 
sence; that the actual carrying out of the 
work comes as close to schedule as a train in 
a winter blizzard ; if you find that the meeting 
which started with broad grins ends in be- 
wilderment and confusion and that there was 
considerable guess-work about the whole 
thing, it is safe to conclude that the value 
of the result depends upon the efficiency of 
the start. 

A train leaves New York at eight o'clock 
in the morning and is due in Buffalo at five 
o 'clock in the afternoon, stopping at Albany, 
Utica, Syracuse and Eochester. From the 
time preceding its leaving New York until 
it arrives in Buffalo, the train is carefully 
watched, its leaving time at each point be- 
ing wired ahead, orders being issued at each 
stop for the next lap of the journey. Does 



EFFICIENT DISPATCHING IN THE FOUNDRY 225 

the engineer or conductor worry about the 
arrival in Buffalo? Hardly. Their chief 
concern is the trip from New York to Al- 
bany ; Albany to Utica ; Utica to Syracuse, to 
Rochester, to Buffalo. If engines are to be 
changed at Albany, the engine is ready when 
the train pulls in. If a slower train is ahead 
of the fast one, at a certain place, known in 
advance, it is side-tracked to allow the fast 
one to pass. In case a dining-car is to be 
attached at Utica, it is a safe bet that the 
diner will be added to the train as soon as 
the stop is made. If the crew is supposed 
to change at Eochester, it will be found that 
the new crew is on hand and waiting for the 
train — something would happen if they were 
not. The train arrives in Buffalo on sched- 
ule time, according to plan mapped out in 
New York before the train left, and lived 
up to all along the line — a smooth, harmoni- 
ous working arrangement, known in railroad 
circles as " dispatching' ' — the theory of 
which is, no train is ready until everything 
is or will be ready for the train. Why not, 
therefore, apply the same theory to the foun- 
dry business and dispatch jobs in the same 
manner as a railroad dispatches its trains'? 
In order to get all that is possible out of 



226 MAXIMUM PRODUCTION 

the foundry, we must get away from the 
theory that making a piece of work depends 
altogether upon the moulder, for the moulder 
in the broadest sense is only a medium — the 
factor between (A), what he is given to work 
with, (B), the conditions under which he 
works, and the finished casting, from which 
we can readily understand why A and B 
should receive careful consideration in their 
relation to proper dispatching of work — 
more attention than is usually given them. 

As to A — the articles a moulder is given 
to work with — they can be classified as shown 
on the opposite page. 

Concerning B — the conditions under which 
a moulder works — it is obvious that he can 
work efficiently only when he can use, to the 
best advantage, the items listed at A, so it is 
distinctly up to the shop management to see 
to it that the men are not held up because 
of faulty conditions. They must be made 
right. As an example of what I mean: A 
moulder (now a shop foreman) had been 
hired, and, coming from another city, he 
started in the next morning. He was given 
a piece of work to make, and from 11 to 12 
o'clock he was hunting up gaggers for his 
mould ; not finding any, he looked up his fore- 



efficient dispatching in the foundry 227 

Classification of Articles with Which the 
Moulder Works 



1 — Those subject to changes 
(equipment and rigging) / 



Patterns 

Sweeps 

Flasks 

Loam plates 

Lifting plates or rings 

Spindles 

Arbors 

Cores 



r A — Facilities 



2 — Those subject 
to little or no 
change. 



B— Tools 



C Facing 
Sand -l Heap 

L Parting 
Eisers 
Nails 
Gaggers 
Rods 
Chaplets 
Blacking or wash 
Clamps 
Wedges 

Chains and roll- 
ing devices 

r Rammers 
Hammers 
Shovels 

Finishing tools 
Torches and wick- 

ing 
Hooks 

Wood screws 
Brushes and swabs 



228 MAXIMUM PRODUCTION 

man and advised him as to his fruitless 
search. The foreman asked the moulder if 
he thought he had any tucked away in one 
of his vest pockets, to which the moulder re- 
plied — "no, and I didn't bring any in my 
grip, either." After the noon hour, the 
moulder quit, and the foreman was at a loss 
to understand why. The moulder was quick 
to see that he would be working at a disad- 
vantage if the foreman evinced no greater 
concern than his remark indicated, and the 
foreman violated two of Mr. Emerson's 
twelve principles of efficiency — common sense 
and the fair deal — first, in making the speech 
he did, and second, in not seeing to it that the 
gaggers were quickly found and promptly 
supplied the moulder. 

The conditions under which a moulder 
works we may classify in a general way as 
follows : 

1 — Foundry orders — knowledge of and * 
their following up. 

2 — Storage and handling of materials, 
supplies, etc. 

3 — Selection of patterns, sweeps and core 
boxes. 

4 — Eepairing and altering the above. 



EFFICIENT DISPATCHING IN THE FOUNDRY 229 

5 — Selection of flasks. 

6 — Repairing and altering the above. 

7 — Flask storage, piling, etc. 

8 — Removal of castings, gaggers, rods, 
etc., from the sand. 

9 — Tempering of moulding sand for use 
by moulders. 

10 — Mixing of facing sand. 

11 — Shop carrying arrangements with 
reference to the equipment and rigging listed 
at Al. 

12 — Supplying the moulders with facilities 
listed at A2A. 

13 — Furnishing the moulder with proper 
tools by list A2B. 

14 — Crane facilities. 

15 — Arrangements affecting the general 
shop labor. 

Foundry dispatching is made up of three 
principal elements: 

1 — The parties concerned. 

2 — The planning. 

3 — Execution according to the plans. 
And if proper attention is given to them, 
faulty conditions will cease to exist, for their 
-assumption is— wo job is ready until every- 
thing is OR WILL BE ready for the job. 



230 MAXIMUM PRODUCTION 

The persons concerned are : 
1 — The foundry foreman. 
2 — His assistant. 
3 — The core-room foreman. 
4 — The pattern-shop foreman. 
5 — The man in charge of the pattern stor- 
age. 
6 — The man in charge of the flasks. 
7 — The flask carpenter. 
8 — The labor boss. 

The element planning is made up of six 
principal considerations : 

1 — What is to be made \ ~ , . 

2 — Who it is to be made by J 

3 — Where it is to be made — Location 

4 — When it is to be made — Time 

5 — Hoiv it is to be made \ p a 

6 — With what it is to be made J 
while execution is made up of: 

1 — Knowledge of the plans made. 

2 — Preparations for carrying them out. 

3 — Carrying out the plans as per schedule. 

Now that the articles used have been classi- 
fied, the general shop conditions outlined, 
and dispatching defined as regards elements 
and considerations, the task of next impor- 
tance is to harness the three together so as 



EFFICIENT DISPATCHING IN THE FOUNDRY 231 

to make an efficient working arrangement. 
To this end we mnst give some considera- 
tion to that which is really our starting point 
— the order, both as regards its availability 
and the promise to ship. Eight here is where 
nearly every foundry experiences trouble — 
some occasionally, others nearly all the time 
— because not enough attention is given to 
the availability of the work and promises are 
made before all the facts are known. 

What must be considered in order to pass 
upon the availability of a piece of work ? An 
order must pass the following test : 

1 — Are the patterns and core boxes as per 
order f 

2 — Are they ready for delivery into the 
foundry! 

3 — Are there flasks to accommodate the 
work? 

4 — If not, will they have to be made, or 
can other flasks be altered to suit, and if 
so, what work will be necessary? 

5 — What will the job take in the way of 
rigging? 

6 — Is the rigging on hand ready for use, or 
will it have to be made? If it will have to 
be made, what will be necessary? 

7 — Will anything be necessary in the way 



232 MAXIMUM PRODUCTION 

of specials, as for instance rods, gaggers, 
clamps, etc.? 

8 — How long will it take to get the job 
prepared as above! 

Until an order can pass this test, it should 
be classified as not available, and every one 
so advised, and nnder no consideration, ex- 
cept that of the most extreme urgency, should 
such a job be started. A rule of this kind 
will work wonders in any foundry. 

After the matter of availability has been 
passed upon, the next thing to consider is — 
the promise — a point about which a book 
could be written. Orders are either accom- 
panied by a request to make shipment at a 
certain time or are marked "rush," "as soon 
as possible,' ' "at once," or perhaps the mak- 
ing of the work is left altogether to the shop 
management. Promises are usually required 
in all instances, and if not they should be 
made and recorded just the same as if they 
were required, so that there will be some in- 
formation on hand should the shop be asked 
a little later to furnish some idea as regards 
shipment. After promises have been made, 
it is not a difficult task to keep such track of 
them as will result in an excellent knowledge 
of anticipated delivery dates. One thing 



EFFICIENT DISPATCHING IN THE FOUNDRY 233 

should be remembered, however — promises 
should never be made before the availability 
of the work has been passed upon. Such 
promises are never dependable, and the time 
and energy in making them is usually wasted 
— as a great many know. 

An efficient order arrangement that will 
give proper consideration to the two fea- 
tures (availability and the promise) must 
therefore be so arranged as — 

1 — To admit of a quick and ready refer- 
ence to the various items called for. 

2 — To show availability or non-availabil- 
ity, at a glance. 

3 — To show anticipated delivery dates. 

4 — To notify the pattern storage what is 
wanted in the way of patterns, sweeps and 
core boxes. 

5 — To enable pattern storage to promptly 
notify foundry as to the condition of the 
items called for. 

6 — To have the patterns, sweeps and core 
boxes laid out by the pattern storage in a 
space necessary to allow those who are re- 
sponsible for the planning to get at them 
easily. 

7 — To show the reasons why the work is 
not available. 



234 MAXIMUM PRODUCTION" 

8 — To have a provision for checking the 
work as the following items become ready: 

A — patterns and core boxes; B — flasks; 
C— rigging. 

It is evident from the above that we are 
now in possession of three valuable items of 
information : 

1 — We know what is not available, and 
why. 

2 — We know when work becomes available. 

3 — We know when work is wanted, or the 
promised date. 

This knowledge serves as a valuable aid in 
keeping after the jobs not available and se- 
lecting what should be made — a condition of 
affairs much to be desired, as every one con- 
ducting foundries can well appreciate. If 
every foundryman was in possession of the 
above information, what a saving there 
would be in time that is now wasted because 
the patterns are not ready, or cores are not 
made, or flasks are not in shape, or rigging 
is not in, and many other causes which result 
in loss of time that nets the company abso- 
lutely no return for the amount invested. 

With our knowledge of what is available 
and what is to take preference, we can com- 
mence the task of getting the work under 



EFFICIENT DISPATCHING IN THE FOUNDRY 235 

way according to the following general out- 
line : 

l_The work should be in charge of a com- 
mittee, comprising the foundry foreman, his 
assistant, the core-room foreman, the flask 
and labor bosses. 

2— The work should be undertaken as early 
in the day as possible, so as to allow ample 
time to get in readiness whatever may be 
needed to start the jobs off properly. 

3_The work being made in the shop and 
the men engaged on it should be carefully 

sized up. 
4— A means should be provided for listing 

the work as planned. 

5— In selecting the work, the six considera- 
tions under the element planning should be 
brought into play. 

6— If more than one job is selected for a 
man, attention should be given to the order 
in which they are to be made, as in this way 
it will be known what work to get ready 

first. 

7 The core-room foreman should note 

carefully the selections, so he may have the 
important core boxes sent in first. 

8— The flask boss should note what flasks 



236 MAXIMUM PRODUCTION 

will be necessary for the various jobs that are 
planned. 

9 — The labor boss should note what rig- 
ging will be necessary, so that he can get 
at work as soon as the planning is over with. 

10 — A means should be provided for mark- 
ing the patterns with the names of the men 
who are to make them. 

11 — The pattern-storage man should set 
apart from the patterns available such as 
have been scheduled for making. 

With the above consideration given to the 
planning, we can next consider the third ele- 
ment of dispatching — execution. As was 
previously pointed out, this is made up of 
three steps — knowledge of the plans made, 
the preparation for carrying them out, and 
carrying out the plans as per schedule. 

Knowledge of the Plans Made. — Any 
plan for betterment, in order to be produc- 
tive of results, must take into consideration 
the importance of a general understanding 
of things. Several persons may be involved, 
and unless the relation to each of the whole 
scheme of things is clearly outlined, there is 
certainly going to be confusion, the same as 



EFFICIENT DISPATCHING IN THE FOUNDRY 237 

there would be confusion on a railroad (or 
even worse, a serious wreck), if there existed 
any doubt as to a correct understanding of 
the orders that may have been issued. With 
this in mind, the idea of presenting the plans 
made to those interested, in some convenient 
form for reference purposes, is therefore 
self-suggestive. This should be done as soon 
after the work of planning as possible, in 
order to give those concerned the schedule 
of work so that they will have plenty of time 
in which to give proper consideration to 
the next step. 

Preparations for Carrying Out the 
Plans. — An analysis of this will show that it 
divides into the following: 

1 — The patterns. 

2 — The cores to be made. 

3 — The flasks to be located, repaired or 
changed. 

4 — The rigging to be brought in and the 
necessary changes made. 

5 — Special features looked into; for in- 
stance, special gaggers, rods, clamps. 

6 — Changes in conditions to facilitate the 
particular work coming in. 

7 — The work at night. 



238 maximum production- 

Patterns. — Small patterns should be 
brought into the foundry on the afternoon 
previous to making and placed in racks for 
the men. Large patterns should be brought 
in toward night and be arranged in some 
convenient place from which point they can 
be easily handled. 

Cores. — As soon as possible after the 
planning, the core-room foreman should see 
to it that the most important core boxes are 
sent in so that his force can begin on them 
without delay. As soon as he gets his sched- 
ule showing the planning in detail, he can 
have the rest of the boxes brought in and 
the cores made in the order in which they 
are scheduled to be used. 

Flasks. — The man in charge of the flasks 
should ascertain what is necessary to take 
care of the work coming in. Flask parts 
that may have been previously made should 
be assembled; those needing chucking or 
changes in the barring should be promptly 
attended to, the necessary patterns to be 
taken from the pattern storage for this pur- 
pose. If repairs are needed they should be 
made at once. 



EFFICIENT DISPATCHING IN THE FOUNDRY 239 

Eigging. — Rigging in the way of plates, 
rings, arbors, etc., should be brought in and 
the necessary changes made so that they will 
be available when wanted. Only in very rare 
instances should a moulder have to wait until 
an arbor or a ring is looked up and brought 
into the shop. 



Special Features. — If special gaggers, 
rods, or clamps will be needed, they should 
be made on the day previous so as to be in 
readiness when wanted. 

Conditions. — Changes in conditions should 
not be slighted. A job may take a special 
mix of sand; a pit may have to be dug; a 
large amount of heap sand may be needed; 
brick may be used, or something else possi- 
bly varying from the ordinary method of 
procedure may have to be done, and the 
time to do it is certainly not when the 
moulder is at work. 

Night Work. — The man in charge of the 
night force should be informed as to his 
share of the work necessary to carry out the 
procedure as scheduled. Castings should be 
shaken out and taken to the cleaning floor; 
gaggers removed from the sand heap and 



240 MAXIMUM PRODUCTION" 

placed on the back end of the floors; sand 
tempered and pnt in condition for use by the 
moulders in the morning, and the flasks not 
needed by the men taken from their floors. 
Pits should then be dug, according to the 
sizes needed for the work to be made in them. 
At any rate, a proper knowledge of the 
plans, plus careful preparations, will assist 
materially in getting everything in readi- 
ness. There is no excuse, except, perhaps, 
in the case of breakdown jobs, for work to 
be held up because something has been over- 
looked. Wise planning will see further than 
the day following — it will look two or even 
three days ahead so that if a flask has to 
be made or rigging planned, the work can 
be begun a day or two previous to schedul- 
ing the jobs. 

Carrying Out the Plans as per Schedule. 
— This is a subject of vast importance. 
Planning in itself may be careful and thor- 
ough; preparations to carry plans out may 
be up to standard, but unless the actual pro- 
cedure is one which does things according to 
the schedule, the results will not be forth- 
coming. 

In the first place, the first hour or so in 



EFFICIENT DISPATCHING IN THE FOUNDRY 241 

the morning is really the most important time 
in the day. There are a lot of men to be 
attended to ; flasks, patterns and rigging must 
be distributed, and it cannot all be done at 
once or to advantage unless there is some 
organized arrangement. The following plan, 
therefore, seems to fit: 

1 — The night force, after the regular night 
work as outlined is done, should (according 
to the schedule furnished the night foreman) 
place on the moulders ' floors the large flasks 
that are to be used, in which should be placed 
the large patterns. If pits are to be used, 
the patterns should be placed near them. 
This will lighten the work of the cranes to 
quite a degree. 

2 — About a half-hour before the regular 
starting time in the morning, the laboring 
force should report and distribute the 
smaller patterns and flasks. 

3 — As soon as work is begun in the morn- 
ing, whatever may be necessary in the way 
of rigging should be taken to the floors. 

4 — A man should be placed in charge of 
the laboring men, whether they directly as- 
sist moulders or not, to whom the moulders 
can make known their wants and he should 



242 MAXIMUM PRODUCTION 

be held responsible for seeing to it that they 
get what they want as quickly as possible. 

5 — There should be a regular place for the 
supplies, etc., listed previously, and the 
knowledge of their location should be in pos- 
session of all concerned. 

6 — Facing sand (which should be mixed in 
advance) should be kept at each moulder's 
floor and replenished as necessary before 
(not after) the men may need some. 

7 — The labor foreman should keep care- 
ful watch over the needs of the men as to 
copes. There is no excuse for a moulder 
asking for his cope only to find that it is at 
the bottom of a pile. 

8 — The moulders should be kept supplied 
with tools and equipment and should report 
when they need such things. I recently saw 
a moulder trying to mend a mould in the 
dark. Some one had stolen his torch and he 
was afraid to mention the matter for fear 
of being called down for his carelessness. 
There is certainly no money in such a state 
of affairs. 

9 — Cores should be furnished the men in 
advance of their requirements. They should 
never be made to go for them. 



EFFICIENT DISPATCHING IN THE FOUNDRY 243 

10 — The crane service should be watched 
very, very carefully. "A whole mouthful," 
a foundry foreman recently said when this 
was mentioned to him. True, but a study 
and ingenuity will find ways to keep the de- 
lays due to crane waits at a surprisingly low 
point. 

11 — The general shop labor should be 
made to jump quickly when moulders want 
things, such as gaggers, clamps, etc. The 
idea is to save time, and if two steps can be 
taken instead of one, things will be further 
ahead. 

12 — It should be a rule that no work is to 
be done by moulders or coremakers that can 
be done at less expense by those less skilful. 

A pretty large contract this ! Certainly— 
an ideal state of affairs — an ideal that many 
a foundry can come within reaching distance 
of, if the work is properly organized, in the 
hands of a hustler, and every one made to 
do his part. It means work, of course, but 
no one ever accomplished anything worth 
while by weak, half-hearted trying. 

Why necessary? To save time that can he 
utilized in turning out castings. Do not 
count by the usually accepted standards — 



244 MAXIMUM PRODUCTION 

the hours time or the wages expended per 
hour — but by the pounds you can produce in 
every hour saved at the value per pound. 
Your men are your investment on which you 
win or lose. Arrange it so that they can 
work to the best advantage, and you are as- 
sured excellent dividends in extra tonnage. 
They will not only like it, but will show their 
appreciation by exerting themselves in order 
to stay with such a progressive concern. 
You will like it, too, for after all you measure 
your likes and dislikes in the foundry busi- 
ness by the size of your bank account after 
you balance up. The suggested procedure 
will help you to increase it. 



Chapter XII 
HANDLING SHOP DETAILS 

"T> E sure yon are right, then go ahead' ' — 

■*-* a bit of advice as applicable to the 
foundry industry as to the individual, 
for if the business of the foundry is to get 
its share of work at right prices, and make 
it at a figure which will net a reasonable 
profit, then it is essential that attention be 
given to — 

1 — A definite method of procedure. 

2 — Action according to the procedure out- 
lined. 

A foundryman once came at me with-— " If 
you white-collared gentry would once get out 
here in the thick of things, you would soon 
cease your ranting about how a foundry 
should be run. I'm doing all the jumping 
around I can, but the result seems to be a 
slam at this and a kick at that performance. ' ' 
I replied that his criticism was a fair one; 
that knowing how he was hampered because 
of the conditions under which he was work- 
245 



246 MAXIMUM PRODUCTION 

ing, there was certainly little use of kicking 
without offering at the same time some good 
workable suggestions aimed to boost things 
along. 

A few years ago I saw the written in- 
structions given to the superintendent of a 
large concern at the time he assumed charge, 
and the whole proposition was nothing but 
generalities indicated by about 150 words. 
No specific instructions; no details of what 
he was to do or how far he was to go. 

I have known good shop managers to make 
every effort to obey the order "maximum 
production in the shortest time and at the 
lowest cost" — who were not able to carry 
on their work properly because of the con- 
ditions under which they were working. In 
other words, quality of work was sacrificed 
for quantity. 

If a shop manager is supposed to be a 
mind reader, to sense out what is required 
of him ; to be a chaser, going after this, look- 
ing up that, devoting his time to details that, 
while important in themselves, keep him 
from attending to more urgent matters — 
don't hold him responsible if he fails to 
make good — if the management knows what 
constitutes "making good." If, however, the 



HANDLING SHOP DETAILS 247 

idea is not merely "he is supposed to know 
his business,'' but "it is our place to tell him 
what his business is to be," plus an arrange- 
ment whereby he can devote a good share 
of his time to planning and scheming, study- 
ing his men, his work and his conditions, 
then it is a safe bet that unless he is incompe- 
tent (which would show in a very short time) 
he will not have to be "carpeted" many times 
in a year. 

The effort to get away from this unfair- 
ness, this shifting of the responsibility, this 
hand-washing process, has led me to sur- 
round the shop manager with such assistance 
as will enable him to be a manager — not- an 
apology for one. This means not only "the 
fair deal," not only better relations between 
man and management, but greatest of all — 
maximum results. 

An analysis of foundry work will show 
that the making of castings is separable into 
the following elements: 

A. — Eeceipts of orders 

B. — Orders to the foundry 

C— Making- 
Rigging 
Cores 
Moulds 



248 MAXIMUM PRODUCTION 

D. — Casting — 

Melting 

Pouring 
E. — Night work 
F. — Cleaning and inspection 
Gr. — Shipping. 

Each one of these seven elements is a fac- 
tor in efficient management, and must receive 
its share of attention. A prominent foun- 
dryman once told me that every customer 
was a "pref erred' ' customer, and that it was 
necessary for him to be in possession of 
such information as would enable him to 
supply any of them with the details regard- 
ing their work " right off the bat." Unless 
he could do this, he could not convince them 
that he was looking after their interests. 
The arrangement must therefore be de- 
signed to take proper care of these elements 
and at the same time supply those interested 
with the necessary facts — not after digging 
into records for an hour, but at once. 

In a general way any efficient shop method 
must be designed with these considerations 
in view : It must furnish a maximum amount 
of information at a minimum expenditure of 
time and money; it must provide the execu- 
tive with a proper follow-up arrangement; 



HANDLING SHOP DETAILS 249 

it must reflect the conditions in the shop at 
all times as regards both production and 
cost ; it must be elastic in order to fit the re- 
quirements of any foundry or the wishes 
of the executive; it must furnish informa- 
tion which is on tap and in serviceable form ; 
it must supply clear and concise records as 
to results daily, weekly, and monthly. In 
short, it must be designed to provide the 
executive with the means of conducting his 
business "to the machine-shop door" with 
the same care that is usually exercised "from 
the machine-shop door." 

While a hard and fast rule can never be 
laid down for any specific case without a 
good knowledge of conditions, the following 
is an outline of a procedure which can be 
varied to suit requirements. If the foundry- 
man finds it difficult to decide what he really 
wants, outside advice should be secured so 
that he will get the best arrangement for his 
particular business. 

To start at the beginning: Upon receipt 
of orders from customers, the first step is 
their proper numbering. Each order should 
have a separate and distinct number for 
identification purposes, and in addition a 
number to designate the particular class of 



250 MAXIMUM PRODUCTION 

work, which can be termed "symbol num- 
bers." Order numbers should be assigned 
with reference to the elements outlined in 
the fourth chapter, as follows : 

Special work for customers . . 1,000-1,999 

Maintenance 2,000-2,999 

New Construction 3,000-3,999 

Eeconstruction 4,000-4,999 

Expense 5,000-5,999 

Commercial Production 6,000-9,999 

The first figure of any number shows at a 
glance the kind of work covered. Symbol 
numbers may be alphabetical and numerical 
for the number of times letters have been 
used. As an example, Smith, Jones & Com- 
pany may order castings four times during 
the month, and we may assume the number- 
ing to be — 

Symbol— K2; 

Orders— 6,125, 6,210, 6,225, 6,304. 

While the numbering looks complex, it has 
proven efficient in foundry production and 
cost accounting. Classification according to 
the symbol K2 at the end of the month will 
give production, time and cost of castings 
for Smith, Jones & Company without refer- 
ence to order number or specific casting. 



HANDLING SHOP DETAILS 



251 



Sorting will give weight, time and cost by 
order numbers. If No. 6,125 includes twenty 
fly-wheels, sorting and totaling would give 
the information for them. In this way we 
have all the essentials necessary to cost of 
any casting or order made without having to 
compile it in each instance. 

After the order has been properly num- 
bered, it is obvious that the customer 's order 
must be converted into an order which those 
interested can use for getting out the work. 
A simple and efficient form is shown in Fig- 
ure 25, which should be made in triplicate 



^ 














|_Des. 




Totals, 




Shipped 








No.Pieces 








Weieht 








Des. 








Shipped 








No.Pieces 








Weight 








Des. 








Shipped 








No.Pieces 








Weight 








Des. 








Shipped 








No.Pieces 








Weight 








Des. 






Shipped 






J0L 


No.Pieces 








Weight 








Des. 








Shipped 








No.Pieces 








Weight 


" 








The Engineering Xagattna 



FIG. 25. FORM FOR WORK ORDER, 



252 MAXIMUM PRODUCTION 

for final delivery as follows: One copy to 
shop superintendent; one copy to shipping 
department; one copy as office record — all 
to be filed according to customer. 

The orders are now properly numbered 
and issued. What is the next step ? To start 
in and make the castings from the informa- 
tion as we find it, or to go a step farther and 
furnish the shop management with addi- 
tional assistance? It is true that the fore- 
man knows what is to be made. He could 
go out to the pattern house, get the pattern, 
and give it to a moulder. The moulder could 
get a flask, make the mould, and pour it. 
The casting could be cleaned and shipped, 
and the transaction would be ended. But if 
we multiply these performances by the num- 
ber of jobs that run through the foundry 
during the course of a day, we should find a 
most unscientific state of affairs, due to the 
confusion that would exist. A more efficient 
management is therefore absolutely neces- 
sary. 

The first thing to do is to provide a place 
from which point the details, as outlined in 
the chapter on "Dispatching," can be prop- 
erly handled. This should be located so that 
it can be reached easily by the men in the 



HANDLING SHOP DETAILS 253 

shop, and it can be called the "Dispatching 
Office.' ' 

To get the work started properly, the copy 
of the order (Fignre 25) intended for the 
shop superintendent should be sent to the 
dispatching office and the one for the shipper 
to the pattern house. 

The person in charge of the pattern house 
should note the orders received and make out 
a small card for each pattern, on which is to 
be entered the information necessary to iden- 
tify it properly, the reverse side of this card 
being gummed for attaching to the patterns. 
He should then look over his patterns, lay- 
ing out such as are ready for sending into 
the foundry ; to these should be pasted these 
small cards, and over them should be applied 
a coating of shellac, to make reading an easy 
matter when the patterns are in use. 

If it happens, as it often does, that he has 
cards covering patterns that will have to be 
made, altered, or repaired, he should make 
out an "exception" report covering such 
work, sending this report to the dispatching 
office, filing the cards he holds in his office. 
As patterns of the kind just mentioned be- 
come ready for delivery (gummed cards for 
which he has on file), a report is made out 



254 



MAXIMUM PRODUCTION 



which accompanies the " exception' ' report. 
So much for the pattern-shop procedure. 

As the foundry is concerned with time con- 
sumed on work, production, rejections, and 
efficiencies, we must provide some means to 
link these together. To do this to advantage 
we must provide a card which can be used 
in dispatching, for costing, by the men in the 
shop, as an order, etc. Such a card, which 
can be called a "tally" card, may be ar- 
ranged as shown in Figure 26. It should be 
written in triplicate for moulders and in du- 
plicate for all other employees, and be han- 
dled as will be outlined later. 



Foundry Tally Card 


Symbol No Order No- 


-Acct.No. Issued 


No.Reqd. 


DESCRIPTION 




Patt No- 


Wanted 


Machine No. 


Standard Time 


Actual Time Cost 


Schedule 
No. 


Quit 






Men 


Bate 


Amount 


Floor No. 
















Pieces to Flask 










Per- 


1 


Elapsed 






Dept. 


Cast 


Men 


Allow 






Total 
Sfd 
Time 






Not Cast 


Total 
Act.Time 










PRODUCTION 




INSPECTION 


SHIPMENT 


No.To 
Do 


Balance 


Good 


Bad 


Shipped 


Vi* 


Finished 




Weight 




Wei»>" 


Replac 


3d 
















Billed 
The Engineering MaQastne 



FIG. 26. FOUNDRY TALLY CARD. 



HANDLING SHOP DETAILS 255 

In connection there are three things which 
should be carefully considered: 

1 — What is being made ; 
2 — What should be made next ; 
3 — What constitutes the work to follow and 
the order in which it should be made. 

This suggests the idea of providing a 
means for properly filing these cards as they 
are made out. They can be filed in card 
files, although the best arrangement would 
be the use of a large board, so that every- 
thing would be in plain view. 

In addition to this, the dispatching office 
should be provided with three card files, 
marked : 

1 — Current day; 
2 — Unavailable ; 
3 — Available. 

Upon receipt of orders received, as shown 
by the superintendent's copy sent to the dis- 
patching office, this office should at once make 
out a card in triplicate for each pattern 
called for, filing these in the tray labeled 
"Current Day"; after this the copy of the 
order should be forwarded to the proper per- 
son. When the "exception" report comes 
in from the pattern house, designating the 



256 MAXIMUM PRODUCTION 

patterns that are not laid out, the dispatch- 
ing office takes the cards from the file men- 
tioned, sorts out the ones listed in the " ex- 
ception' ' report and places them in the " un- 
available' ' file, while the balance (which are 
ready for the foundry) are placed in the 
"available" file. From the auxiliary report 
from the pattern house, accompanying the 
"exception" report and covering patterns 
that since the date of the original order have 
been made, repaired or altered, the dispatch- 
ing office learns which cards may be removed 
from the "unavailable" file and filed with 
the ones covering "available" work. These 
cards should be classified by class of work 
and by symbol and order number. 

As work is planned and scheduled, the cor- 
responding "tally" cards which are on file 
in the "available" are to be removed and 
properly distributed on the board mentioned, 
according to the schedule adopted by those 
responsible for the planning. We are now 
ready for shop operation, up to which point 
everything should have been properly 
planned and laid out. 

When men begin work in the morning, 
they should report to the dispatching office 
for "tally" cards, which should be on the 



HANDLING SHOP DETAILS 257 

boards classified as "available work to be 
started next," The starting time slionld be 
entered, the triplicate copy given to the men, 
and the other two copies filed together as 
"work being made." As this is being done, 
the top "tally" card in triplicate of those 
classified as "work to follow" should be 
moved up to file for "available work to be 
started next." 

As men complete their work, they are to 
return to the dispatching office with their 
triplicate copies. The corresponding copies 
are to be removed from the boards, the fin- 
ishing time entered, the number completed, 
and the date ; the tickets for the next job are 
then issued to the man and a new "tally" 
card is made out to cover the balance to be 
made shown on the card just turned in — this 
to be properly filed according to the plan- 
ning. All cards should show account num- 
bers as outlined in Chapter XIV. The origi- 
nal and duplicate of all cards turned in are 
to be sent to the office, while the triplicate 
is to be sent to the shipping department. 

This department should have two files, ar- 
ranged as follows: 

A — For "work coming through." 

B — For ' ' castings on hand, ' ' 



258 MAXIMUM PRODUCTION 

These are indexed by symbol numbers and 
sub-indexed in some cases by name of pat- 
tern, as, for instance, beds, cylinders, pulleys, 
etc., for customers whose work amounts to 
quite a little. The clerk, upon receipt of the 
triplicate cards covering work made, files 
them according to symbol number, by pat- 
tern number, by date in the file for "work 
coming through' ' — an inventory of what is 
going on. As received, these cards do not 
show entries covering number and weight of 
the pieces good, the pieces bad, or the cost 
postings. 

On the day following the making of the 
work and after the castings have been 
cleaned, the inspector takes the file for "work 
coming through," weighs up the good cast- 
ings and enters on the proper card the num- 
ber and weight under "good"; these cards 
are placed in the front of the file. * After 



* It might be well to state that the slips placed in the 
front of the file by the inspector include the cards 
covering the work rejected, for the reason that such 
work ceases to be "work coming through," and while 
not "castings on hand," should be first posted to the 
corresponding cards in the office and then placed in the 
file for "castings on hand" in order that the shipping 
clerk may know that the work was made, but proved 
defective. When the cards covering the work replacing 
the bad come through, those covering the bad are taken 
up and destroyed. 



HANDLING SHOP DETAILS 259 

this is done, he proceeds to make out a re- 
jection report covering the castings which 
do not pass inspection, marking the number 
rejected under "bad." These also are filed 
in the front of the file. The file is then re- 
turned to the shipping department. 

This "rejection" report should show what 
is rejected; who made the work; complete 
information as to cause for rejection; wheth- 
er the work is to be replaced or not, and 
whether or not the moulder who made the 
work is to receive credit for the rejected 
work. 

The procedure after the inspection is as 
follows : 

1. The "tally" cards, covering the work 
inspected and classed as good or bad, are 
sent to the office, where the entries as to in- 
spection results are transferred to the corre- 
sponding tally cards (still kept in duplicate) 
as sent in from the dispatching office, after 
which the triplicate copies are sent back to 
the shipping department for proper distribu- 
tion in the file for "castings on hand." 

2. The "rejection" cards are sent to the 
one in charge of the foundry, so that he can 
see what was lost and why, and investigate 
if he desires ; after which he is expected to 



260 MAXIMUM PRODUCTION" 

0. K. any credits to men for spoiled work if 
they were not responsible. The cards are 
then sent to the dispatching office. 

The dispatching office, upon receipt of the 
rejection cards, mnst note the number re- 
jected on each of the various orders, and if 
the orders covered have not been completed, 
the proper entries are to be made on " tally' ' 
cards on the boards, under the heading "to 
be replaced." If the order has been com- 
pleted, a new card is to be made out; the 
pattern house is notified and the work 
planned in the regular way. This arrange- 
ment will enable any foundry to keep a true 
and accurate account of castings made and 
to be replaced — a point of importance, as 
keeping track of the number of good cast- 
ings made is often a confused proposition. 

When castings are ready for shipment, the 
corresponding slips are removed from the 
"castings on hand" file, marked with the 
date of shipments and the routing, and as 
soon as the shipment is made, are sent to 
the office, where they are then used as the 
authority for rendering invoices to the cus- 
tomers. It often happens that the shipping 
clerk wants to make a shipment as soon as a 
casting is cleaned, or a casting will be rushed 



HANDLING SHOP DETAILS 261 

from the foundry, cooled, cleaned as quickly 
as possible and shipped. In such cases, the 
shipping clerk takes the triplicate "tally" 
card from the "work coming through" file, 
enters the proper information, and sends it 
through the office, for noting, to the billing 
clerk for invoicing. 

Let us consider for a moment some of the 
special conditions this arrangement takes 
care of. Assume that a casting has been 
started, but that it has not been completed 
at casting time. The card as turned in 
would show that no pieces were made and 
that nothing was cast and would be filed in 
the "work coming through" file, reference to 
which would show that the work was started 
but not completed. We will assume that on 
the day following a workman spends four 
hours finishing up the job, which is cast the 
same night. The card would be turned in 
properly marked, forwarded to the shipping 
department, and filed in front of the slip for 
the previous day. On the day following, 
when the casting is inspected and reported 
as good, this information would be posted to 
the card covering completion and sent to the 
office for entry, while the one covering the 
starting of the job, which is no longer of any 



262 MAXIMUM PRODUCTION 

use, is destroyed by the shipping clerk. Here 
we have a complete history of the transac- 
tion, for we have, first, knowledge that the 
work was started but not completed; then 
completed and cast but not inspected, and 
finally inspected, reported as good, and ready 
for shipment. From this it can be seen that, 
regardless of the time taken to make work, 
the shipping department will have this in- 
formation on file. 

Let us consider a case where a large cast- 
ing is made and cast the day it was started, 
although it remains in the sand during the 
following day. The card would be filed as 
"work coming through,' ' and would be taken 
with the others, in order to post the results 
of the inspection. In going through the list, 
the inspector finds that no such casting is on 
the cleaning floor. He therefore marks it 
with an N, denoting "not on cleaning floor," 
places it back in its proper place in the file, 
and if any reference is made to it, the card 
will show that it was made and cast and that 
the casting was not delivered from the foun- 
dry. This also applies to cases where work 
is made and checked as cast but not poured 
because of a shortage of iron. 

In cases where castings which have been 



HANDLING SHOP DETAILS 263 

reported as good (slips for which are in 
the "castings on hand" file) are subse- 
quently found defective before shipment, the 
cards are removed, marked "scrapped," and 
sent to the office for charging to the scrap 
account for the scrap value, while the cast- 
ings would either be taken to the scrap pile 
or the cupola. 

Now as to the office procedure : After the 
transfer to the original and duplicate 
"tally" cards of the information contained 
on the triplicate received from the shipping 
department, the cards are checked against 
the "in" and "out" clock time cards, in or- 
der to balance the times as shown, after 
which they are rated and extended. The 
cards are then separated and the originals 
filed according to symbol or order numbers 
and classed as moulding labor, while the du- 
plicates are sent to the efficiency department 
— if there happens to be such a progressive 
department in the scheme of things. 

As the cards covering core and general 
labor would be sent to the office direct from 
the dispatching office, rated and extended 
and properly filed, it follows that we have 
the cost of all labor properly classified. At 
any time during the month, required infor- 



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264 



HANDLING SHOP DETAILS 265 

mation could easily be ascertained, while at 
the end of the month, the productive mould- 
ing time and cost and all burden costs could 
be determined, the necessary rates calculated 
and reports covering orders, castings or sym- 
bols made out as shown in Figure 27. 

Let us see what the method really accom- 
plishes : 

1. It shows what is available and not avail- 
able. 

2. It shows what is being worked on. 

3. It shows what is to be made next. 

4. It acts as the means of tallying up the 
work of each employee each day. 

5. It shows the time spent on all work 
done each day. 

6. It transfers, automatically, the work of 
each employee, without regard to the number 
of symbols or account numbers affected. 

7. It shows the work which has been 
started but not completed — work in process. 

8. It shows the work made and cast but 
not inspected — work coming through. 

9. It shows the work made, cast, inspected 
and ready for shipment — an inventory of 
manufactured castings on hand in balance at 
all times. 



266 MAXIMUM PRODUCTION 

10. It furnishes the means for planning 
the work to be done. 

11. It furnishes the means for planning 
and making shipments. 

12. It furnishes the authority for invoic- 
ing shipments made. 

13. It furnishes the file of castings 
shipped, by date of shipment. 

14. It acts as the means of making up 
the payroll, if this is desired. 

15. It shows from day to day the produc- 
tion and cost of all work, by castings, sym- 
bol or account. 

16. It shows from day to day the amount 
of work to be replaced. 

17. It furnishes facts as to rejections, with 
reasons therefor. 

18. It makes every casting pass an inspec- 
tion. 

19. It provides the means of furnishing 
the executive with weekly distributions of re- 
sults accomplished. 

20. It forms the basis of making up 
monthly costs according to any classification 
desired — whether by pattern; customers' 
work; departments; light, heavy and medi- 
um work; by workmen; floors; machines; 
classified weights, etc. 



HANDLING SHOP DETAILS 267 

21. It furnishes the basis for calculating 
efficiencies and the payment of bonus for 
individual eff ort. 

In conclusion, the methods outlined en- 
able the executive to obey the injunction— 
"Know where you are going, then go/' 



Chapter XIII 

THE IMPORTANCE OF CORRECT BURDEN 
APPORTIONMENT 

TT AVE you ever stopped to consider what 
**■ -*• is really involved in finding your costs 
of production, or appreciated the true sig- 
nificance of the word "costing"? If you are 
keeping costs as a means — cost reduction and 
increased production being the end in view — 
then you are (or should be) getting results. 
If, however, you look upon your methods as 
a "fad" or necessary evil, using the informa- 
tion at your disposal to no real purpose, you 
are losing the earning power of money which 
might be expended to advantage in other 
directions, and the only consistent advice is 
either to throw them out altogether, or begin 
all over again with the determination to make 
your methods count for something as a result 
producer. 

We are told that "art" is doing, while 

"science" is knowing; and if this is correct, 

we can only conclude that costing as an art 

cannot and does not accomplish what is pos- 

26S . 



CORRECT BURDEN APPORTIONMENT 269 

sible if treated as a science, which (to put it 
another way) is "organized knowledge " and 
as such must and does get down to the prin- 
ciples involved. The term " costing/ ' con- 
sidered in the abstract, falls far short of 
conveying the full meaning, and here is, per- 
haps, the reason why so many fail to appre- 
ciate its dormant possibilities. Let us de- 
fine it as : 

A science, which has for its purpose the 
giving to the executive of an organized 
knowledge of all pertinent details, that he 
may be in a position to plan for maximum 
efficiency. It demands, first of all, a search 
for the underlying or basic principles which 
affect the success or failure of the enter- 
prise, in order to get at the why or reason of 
things. Once established, they facilitate the 
consideration as to how things should be 
done — the product or result being propor- 
tionate to the excellence of the art or doing, 
upon which depends the application and 
practical use of this product to specific ends. 
Every foundryman will agree with the state- 
ment that a business is conducted for profit, 
and that while it is one thing to dispose of 
something, it is quite another to dispose of 
it at a margin over and above total cost, 



270 MAXIMUM PRODUCTION" 

knowing that you have made it and how 
much. The basis of the sale is what is pro- 
duced, which, as far as this chapter is con- 
cerned, will be castings. Therefore, to find 
the true condition of affairs, we must deter- 
mine what the profits or losses are, which 
cannot be done until costs are ascertained. 
It has long been taken for granted that costs 
could not be determined until the completion 
of the work, but the f oundryman should have 
some means of knowing about what the costs 
are going to be before the work is even 
started. And they can be known in advance 
through time studies, as well as standardiza- 
tion of operations and conditions. 

The next consideration is the elements en- 
tering into the cost of producing good cast- 
ings, which can be divided into three general 
classes : 

l-Materials{?^ ect ° r P™ductive-A. 

LIndirect or non-productive — B. 
n j | rDirect or productive — A. 

LIndirect or non-productive — B. 
3 — General Expenses. 

No argument is necessary to show that if 
the three elements with their subdivisions 
could be charged to the production direct, 



CORRECT BURDEN APPORTIONMENT 271 

the determination of costs would be a simple 
matter ; bnt a glance at the table just shown 
will convince the reader that direct charging 
is possible in two cases only: 

Direct material — 1A. 
Direct labor — 2A. 

and this fact makes, it necessary for the pro- 
duction to absorb the other three items in 
some just and equitable manner to be de- 
cided upon, the sum of these three items be- 
ing, in the majority of cases, a large one ; so 
that upon the correctness with which these 
items are spread over or apportioned to the 
production, depends more than is usually 
conceded. In our search for principles, the 
matter of handling these three items prop- 
erly is of the utmost importance and can be 
really classed as our basis or foundation. 

Direct or productive materials comprise 
the various pig irons, scraps, fluxes, coke or 
coal, the total cost for any period being a 
direct charge against whatever is produced. 

Indirect or non-productive materials com- 
prise incidental stores, supplies, etc., which 
are used in order to facilitate the manufac- 
ture of the product ; the total cost of which, 
although a charge against what is produced, 



272 MAXIMUM PRODUCTION 

cannot be charged direct, but must be appor- 
tioned to it. 

Direct or productive labor is the money 
paid to those who actually produce or directly 
assist in producing something having a com- 
mercial value, which can at all times be 
charged direct to specific production. 

Indirect or non-productive labor is the 
money paid to those who, while they do not 
actually produce or assist in producing any- 
thing of value, are necessary in order that 
production may be facilitated and carried on 
to the best of advantage; this expenditure 
constitutes a charge to production by ap- 
portionment, owing to the difficulty in at- 
tempting to charge to product direct. 

Expense is the expenditure entering into 
the general administration of the business, 
the securing of a finished product, as well as 
the marketing of this product to the best of 
advantage, which, on account of its very na- 
ture, cannot be charged to production direct, 
but must be absorbed by it through appor- 
tionment. 

In this discussion, the three items — 

Indirect materials 

Indirect labor 

Expenses 



CORRECT BURDEN APPORTIONMENT 273 

will be classed as "burden" — aptly styled 
by one as "unseen dollars"; and as was be- 
fore stated, the amount of this burden is usu- 
ally a large one, so that apportionment must 
be as correct as possible, otherwise total 
costs are bound to be misleading. We can get 
at this matter of apportionment more easily 
by supposing that a month's production 
consisted of one casting, in which case the 
entire burden would be charged direct to it. 
If the production consisted of ten castings, 
however, each weighing the same, with the 
material and labor costs the same for each 
of the ten castings, then each would absorb 
one-tenth of the burden; and when the cost 
of the last casting was ascertained, it would 
be found that the entire burden had been 
absorbed in a just and equitable manner. If, 
on the other hand, we substitute, as the pro- 
duction, one thousand castings of different 
shapes and weights, with absolutely no rela- 
tion existing between the cost of the direct 
labor or direct material, how are we going to 
make these castings absorb the expense item 
so that each casting or class of castings will 
be charged with an equitable amount 1 

If one thousand tons of good castings are 
produced in a certain period and the total 



274 MAXIMUM PRODUCTION 

burden for the same period is $10,000, we 
can make the production absorb this burden 
by charging $10 to each ton of castings pro- 
duced — this being one method which we will 
term tonnage apportionment. 

If, on the other hand, one thousand tons of 
castings are produced in a certain period and 
the direct-labor cost of producing these cast- 
ings is $5,000, with a burden against this 
production of $10,000, we can make this pro- 
duction absorb this burden by adding 200 per 
cent to the direct-labor cost of any casting or 
class of castings, or $2 in expense for every 
$1 in direct labor — another method which we 
will term direct-labor apportionment. 

It stands to reason that both methods can- 
not be right, although each seems to have its 
defenders. If one method is correct, then 
there is some reason why it is right and the 
other wrong, and this "why" must appeal 
to you, from a dollars and cents point of 
view. To present it properly, it has been 
deemed advisable to submit several cases, 
showing the difference between the two meth- 
ods ; and while at best figures are dry and un- 
interesting, a quiet hour, plus a careful study 
of the figures which are to follow, will make 
the deductions surprisingly interesting. 



CORRECT BURDEN APPORTIONMENT 275 

We will suppose that in a certain period of 
time yonr foundry produced 2,500,000 pounds 
of salable castings, your direct or productive 
pay roll (moulders and coremakers) being 
$15,000; the burden amounting to $22,500, 
and your rates for apportionment, in order 
to make the 2,500,000 pounds absorb the 
$22,500, being: 

Tonnage basis— 90 cents per 100 pounds. 

Direct-labor basis— 150 per cent. 

Case No. 1— Light and Heavy "Work. 

Different Weight— Same Labor. 
You make two castings, in this period, one 
being a small, complicated affair, weighing 
250 pounds, which we will call a gas-engine 
cylinder; the other being a small flywheel, 
weighing 2,000 pounds, each on account of its 
nature requiring the entire time of a moulder 
for a day. Figuring material at $1 a hun- 
dred pounds for melted iron and labor at $3 
per day (30 cents per hour), we have costs 
as shown in the table on page 276. 

A study of these figures will show that in 
the case of the 250-pound casting, the cost B 
is $2.25 higher than cost A, while in the case 
of the 2,000-pound casting, cost D is $13.50 
lower than cost C. Looking further, it will 



276 



MAXIMUM PRODUCTION 



be found that cost A is $3.10 per 100 pounds, 
while cost B is $4 per 100 pounds, the cost B 
being greater than cost A by 90 cents per 100 
pounds, only a difference of $18 per ton. 



Tonnage 



Labor 
Basis. 



250 lb. 

'$2.50 

3.00 

$5.50 
2.25 



"$5.50 
4.50 



2000 lb. 

Material $20.00 

Labor (10 hours) 3.00 



. .Prime cost $23.00 

. .Burden (90c. per 100 lb.). 18.00 



$7.75 (A) ..Total cost. 



. Prime cost $23.00 

. Burden @ 150 per cent . . 4.50 



$10.00 (B) . . Total cost . 



$41.00 (C) 



27.50 (D) 



$2.25 
Cost A is $3.10 per 100 lb. 
" B " 4.00 " " •« 

Difference .90 " " " 



Difference $13.50 

Cost C is $2 . 05 per 100 lb. 
" D" 1.37H " " " 



Difference .67J^ 



Cost C figures out at $2.05 per 100 pounds, 
with cost D at $1.37% per 100 pounds, the 
latter being less than the former by 67% 
cents per 100 pounds, or $13.50 per ton. As 
the intention of this chapter is to show that 
the tonnage basis of burden apportionment 
is incorrect, this can best be proven by show- 
ing that direct-labor apportionment is cor- 
rect. In the first place, we have a small 
casting weighing only 250 pounds and taking 
the entire time of a moulder for the day, 
while a casting eight times as heavy was 
produced in the same length of time, so that 
the productivity (relative amount produced 



CORRECT BURDEN APPORTIONMENT 277 

per man per day) of the latter is eight times 
greater for the particular case than that of 
the former. If, for the sake of argument, 
we assume that the tonnage basis is correct, 
giving the preceding statement the consid- 
eration it is entitled to, we find that the ton- 
nage basis, as compared with the labor basis, 
forces the costs per 100 pounds to decrease 
as productivity decreases and to increase as 
productivity increases. Does this strike you 
as being logical ? On the other hand, we find, 
comparing labor apportionment against ton- 
nage apportionment, that the former forces 
costs to increase as productivity decreases, 
and to decrease as productivity increases, 
which is as it should be. Looking again at 
case No. 1, it will be found that in cost B, the 
burden of $4.50 is really $1.80 per 100 pounds, 
instead of a flat rate of 90 cents per 100 
pounds, and in cost D, the burden is 22% 
cents per 100 pounds, instead of the 90-cent 
rate. In this way you are making the light, 
complicated cylinder cost the most per 100 
pounds to produce ($4 instead of $3.10), and 
the heavier but easier-to-make wheel cost con- 
siderably less per 100 pounds ($1.37% m ~ 
stead of $2.05) — which are things that the 
tonnage basis of apportionment ignores alto- 



278 MAXIMUM PRODUCTION" 

gether. Putting it still another way, would 
you rather accept cost C as the correct cost, 
add 10 per cent as profit, and run the risk of 
losing the order through what is in reality an 
overestimation of $13.50 per ton; or take 
cost D as your basis, add your profit, which, 
with other things being equal, would land 
the order? On the other hand, would yom 
rather take $4 per 100 pounds as your cost 
for the 250-pound casting, which in making 
cost you $1.20 per 100 pounds, add your 
profit and make it, or use $3.10 per 100 
pounds as the cost — 90 cents per 100 pounds 
less — add your profit, and get the work — 
but lose money on it? 

Case No. 2. — Heavy Work. 
Same weight — Different labor. 

In this case I assume that in your foundry 
you have made two castings, each weighing 
10,000 pounds, one taking 60 hours to make, 
while the other was made in 20 hours. As 
the productivity of the man who made the 
one piece in two days is greater than that of 
the man who made the other piece in six 
days, it is logical to expect that the piece 
which took the least time to make — where 



CORRECT BURDEN APPORTIONMENT 279 

the productivity was greatest--would cost 
much less than the piece taking the larger 
amount of time with a smaller productivity. 
Let us see, however, how it works out, 
placing the six-day and ten-day jobs in paral- 
lel columns : 



Tonnage 



10,000 lb. 10,000 lb. 

$100.00 . . Material $100.00 

18.00 (60 hrs.) . . Labor 6.00 (20 hrs.) 



$118.00 . .Prime cost $106.00 

90.00 . .Burden (90c.per 100 lb.) 90.00 



$208.00 (A) Total cost $196.00 (C) 

$118.00 . .Prime cost $106.00 

27.00 . . Burden @ 150 per cent. 9.00 

Labor J 

Basis. "I 145.00(B) . .Total cost 115.00 (D) 



$63.00 . . Difference $81.00 

Cost A is $2.08 per 100 lb. Cost C is $1.96 per 100 lb. 

" B " 1.45 " " " " D " 1.15 " " " 

Difference .63 " ". " Difference .81 " " " 

A study of these figures will show, in the 
first place, that cost B is less than cost A by 
$63, while in the case of the casting where 
the elements are greater productivity and 
lower labor cost per 100 pounds, cost D is $81 
less than cost C, a net decrease of $18. Also 
that cost C is less than cost A by $12, while 
cost D is less than cost B by $30. Looking 
at it still another way, we find that cost A is 
$2.08 per 100 pounds, while cost B is $1.45 
per 100 pounds, a difference of 63 cents per 
100 pounds, or $12.60 per ton. Cost C is 



280 MAXIMUM PRODUCTION" 

$1.96 per 100 pounds, with cost D $1.15 per 
100 pounds, a difference of 81 cents per 100 
pounds, or $16.20 per ton, showing that the 
decrease is greater in the latter case, as it 
should be. By this method we are making 
the casting in which the elements are high 
moulding cost and low productivity, cost the 
most; and, instead of charging a flat rate of 
90 cents per 100 pounds, we make cost D 
bear 9 cents per 100 pounds, and cost B 27 
cents per 100 pounds — the increase being a 
logical one, as reflection will show, yet both 
rates are much less than the 90-cent rate. It 
should be plain that if costs A and C are used 
as a basis, they are overestimated to the tune 
of 63 cents and 81 cents per 100 pounds re- 
spectively — large enough to make any foun- 
dryman "sit up and take notice, " inasmuch 
as there cannot be an over estimation in one 
place without underestimation in another, 
neither of which elements should be allowed 
to creep into any business. The advantages 
of using costs B and D in bidding for heavy 
work, instead of the prohibitive figures 
shown in costs A and C, are no doubt appar- 
ent without any explanation. 



CORRECT BURDEN APPORTIONMENT 281 

Case No. 3 — Light Work. 
Same weight— Different labor. 

In this case we have two small castings, 
each weighing 150 pounds, one taking 7 
hours to make, the other 3% hours — low pro- 
ductivity in both cases, one being even lower 
than the other. As direct-labor apportion- 
ment makes costs increase over tonnage ap- 
portionment as productivity decreases, we 
naturally expect to find that costs under the 
former will be higher than under the latter, 
which the following figures will show to be 
the case: 



Tonnage^ 



Labor 
Basis. 



150 lb. 150 lb. 

$1.50 ..Material $1.50 

2.10 (7hrs.) . .Labor 1.05 (3>£ hrs.) 

$3.60 . . Prime cost $2 . 55 

1.35 ..Burden (90c. per 100 lb.) 1.35 

$4.95 (A) Total cost $3.90 (C) 

$3.60 . .Prime cost $2 . 55 

3.15 . .Burden @ 150 per cent. 1.58 

6.75(B) ..Total cost 4.13(D) 



$1.80 ..Difference .23 

Cost A is $3.30 per 100 lb. Cost C is $2.60 per 100 lb. 

" B " 4.50 " " " " D " 2.80 " " " 



Difference $1.20 " " " Difference .20 " " " 

From this case it will be seen that through 
the labor basis of apportionment cost B is 
$1.80 greater than cost A, while cost D is 23 
cents higher than cost C. Comparing A with 



^S# MAXIMUM PRODUCTION 

C, we find the former greater by $1.05, while 
B is $2.62 greater than D. Consideration 
will show that once more we get onr greatest 
increases where they should be, costs B and 
D being greater than A and C by $24 and $4 
per ton respectively. In this case, instead 
of nsing a flat rate of 90 cents per 100 
ponnds, we have the burden $3.15, amounting 
to $2.10 per 100 pounds and the item of $1.58 
amounting to $1.06 per 100 pounds. 

Comparing all of the three cases, we find 
that in every case the burden cost on the 
tonnage basis was 90 cents per 100 pounds, 
while on the six castings of the three cases 
cited, we get rates, in cost per 100 pounds, 
on the direct-labor basis, as follows: 

$1 . 80 per 100 lb. 

.22^ per 100 lb. 

.27 per 100 lb. 

.09 per 100 lb. 

2.10 per 100 lb. 

1.06 per 100 lb. 

We find that the lowest rate is 9 cents per 
100 pounds (cost D, case No. 2). Here we 
have an hourly product of 500 pounds — high 
productivity, and a labor rate of but 6 cents 
per 100 pounds, consequently the cost should 
be low and reference will show that through 
direct-labor apportionment, the cost was $115 
instead of $196. Is not the low rate of 9 



CORRECT BURDEN APPORTIONMENT 283 

cents instead of 90 cents justified, when the 
facts in the case are considered? We also 
find that the highest rate is $2.10 per 100 
pounds (cost B, case No. 3). Here we have 
an hourly product of about 21% pounds in- 
stead of 500 pounds — low productivity, and 
a labor rate of $1.40 per 100 pounds, instead 
of 6 cents per 100 pounds; consequently, to 
take care of yourself properly, you must have 
a higher cost than tonnage apportionment 
would give you, for by means of it you get 
a cost of $3.30 per 100 pounds, while through 
direct-labor apportionment your cost is $4.50 
per 100 pounds. 

The only logical conclusion from the fig- 
ures heretofore shown is, first, that through 
the tonnage method of apportionment, the 
cost of heavy work is made too high; and 
second, that the cost of light work is made 
too low. We also get a rule from direct-labor 
apportionment, that burden costs are in- 
versely proportional to productivity, which 
the tonnage basis does not recognize. Now 
then, as the tendency in commerce is to lose 
in bulk of sales as price increases, it should 
be evident to every f oundryman, that making 
the cost of heavy work too high is sure to 
result in lost sales in the case of the jobbing 



284 MAXIMUM PRODUCTION 

foundry, or an excessive cost of the foundry 
production to the machine shop in the case 
of the specialty foundry. On the other hand, 
by making the cost of light work too low, the 
tendency is to get plenty of light work at 
prices which are in reality less than cost. 
The result is that both jobbing and specialty 
foundries are hurt alike. 

Getting back to productivity, we may state 
the fact that the more a man produces in a 
given time, the less should be the cost of 
what he produces, and vice versa. If, then, 
the tonnage basis of apportionment as 
against the labor basis does not take this fact 
into consideration (and the figures hereto- 
fore shown clearly indicate that it does not) 
then the method has absolutely no merit and 
is consequently worthless from a commercial 
standpoint. To demonstrate its inaccuracy 
clearly, it was decided to show the difference 
between the two methods graphically. 

Figure 28 shows amounts produced per 
man per day, from 200 pounds to 2,000 
pounds, at different costs per 100 pounds, 
line 1 showing burden apportioned to direct 
labor and line 2 showing burden apportioned 
to tonnage. In plotting this chart, the rates 
heretofore mentioned were used, namely 90 



CORRECT BURDEN" APPORTIONMENT 



285 



» 3 .-,5 










































3,25 










































\ 


\ 






































2.75 
5.50 
5.25 
•.'.00 
!.» 
1.50 
1.25 
1.00 
.15 
.50 
.85 












































\\ 
















Lin. 
Lin, 


1-Bi 
2- 


rd.u , 


pporl 


mod t 


'E! 


UCtlve 

ige 


labor 










\\ 


*2.9! 














LlD( 


3- LI 


jel ' 


"hart 


















V 


\ 








































A 








































s 


\ 






































H 


\ 








































\ 


$1.15 


« 
































**-, 




































'.90 




















































.75 




^ 


^ 


.45 
















~ 






















~~rTl 


r 

















































.85 




.sa< 




S00 400 "600 800. 1000 1900' 1400 1600 1»00 500011). 

The Engineering Magazine 



FIG. 



28. BURDEN COSTS PER 100 POUNDS FOR DIFFERENT 
WEIGHTS PRODUCED PER MAN PER DAY. 



cents per 100 pounds on tonnage, 150 per 
cent on the direct labor, and a daily labor 
rate of $3, so in order to arrive at our values 
for line 1, we take $4.50 as the burden, which 
is divisible by whatever weight is produced 
per man per day. A glance at the chart will 
show that there is a vast difference between 
costs of $18 and $22.50 per ton, on a produc- 
tion of 400 pounds for a man in a day, on the 
one hand, and $18 and $4.50 per ton, if the 
same man can produce 2,000 pounds in a day, 
on the other. 

A foundryman is likely to bring up the 



286 MAXIMUM PRODUCTION 

point, at this time, that certain items of ex- 
pense are proportionate to the increase or 
decrease of the amount produced, which a 
uniform basis of labor apportionment would 
fail to consider. That such a point would be 
well taken can be seen when it is considered 
that in a large number of cases, the more a 
foundry is able to produce, the greater would 
be such items as foundry, core-room and cu- 
pola supplies, cupola labor, repairs to flasks, 
yard labor, handling materials, and perhaps 
a few other items. A compromise, then, 
which will enable tonnage to absorb a cer- 
tain proportion of the burden, and productive 
labor the balance, is perfectly logical — the re- 
sult of such a combination method being 
shown by Figure 29, the same expense items 
being used as in the case of Figure 28, with 
the exception that we assume that $4,500 of 
the $22,500 is proportionate to tonnage, the 
balance to direct labor, the rates being : 

Line 1 — Compromise basis — 18 cents per 
100 pounds on tonnage ; 120 per cent on direct 
labor. 

Line 2 — Flat tonnage basis — 90 cents per 
100 pounds. 

To show the comparisons properly, line 1, 
Figure 29, has been carried to Figure 28 as 



CORRECT BURDEN APPORTIONMENT 



287 



3.50 
3.25 
3.00 
S.M 






































1 










































\ 








































\ 


1 . 








































\ 


















Line 


i- Bu 

nnaft 




"° rt " 


*" ilr 


prodi 


ctlve 


abor 






2.25 




\ 


















Liue 


!- Bu 




port.. 


led to 


touDa 


5* 










A 


Jl.Sf 




































1.15 




*H 


v 








































\ 




































1.S5 






^ 


\ 








































\ 


<■"■ 
































.:j 










s 
















































































































2S 
























AV 




—z 
















.38 




.36 










































200 400 «00 800 1000 1200 1400 1600 1800 50001b. 

The Engineering Magazine 



FIG. 29. BURDEN PER 100 POUNDS FOR DIFFERENT WEIGHTS 
PRODUCED PER MAN PER DAY. 

line 3, the following illustration serving to 
show the difference between burden appor- 
tionments — one case being a large production 
per man per day and the other a small pro- 
duction. Taking the case of large production 
per man per day first, we have : 



Case No. 4. 
Tonnage Basis Labor Basis. Tonnage and Labor 

2000 lb. Casting. 

Material $20 . 00 $20 . 00 $20 . 00 

Labor (10 hrs.) . . 3.00 3.00 3.00 



Prime cost $23.00 

Burden 18 . 00 \ *£• {** \ 



Total $41.00 

Per 100 lb 2.05 



$23.00 

4.50(150%) 



$23.00 



S-HloOlrT 
3.60(120%) 



$27.50 
1.37^ 



$30.20 
1.51 



288 MAXIMUM PRODUCTION 

Examining now the figures with small pro- 
duction per man per day, we find : 

400 lb. Casting. 

Material $4.00 $4.00 $4.00 

Labor ( 10 hrs.) . . 3.00 3.00 3.00 

Primecost $7.00 $7.00 $7.00 

tw^„ , fin (90c. per) 4.50(150%) 72 < ISc.per ) 

Burden 3 - 60 U001b. J ' 7 1 1001b. f 

3.60(120%) 

Total $10.60 $11.50 $11.32 

Per 100 lb 2.65 2.87H 2.83 

After considering all that has gone before, 
Figure 30 will no doubt prove of particular 
interest to foundrymen, in that it shows total 
costs for different weights produced per man 
per day by the various methods of appor- 
tionment. Moulding cost has been taken at 
$3 per day of 10 hours, with material at $1 
per 100 pounds of melted iron, burden on 
the tonnage basis being 90 cents per 100 
pounds, on the direct-labor basis 150 per 
cent, and on the tonnage and labor basis, 18 
cents per 100 pounds on tonnage and 120 
per cent on labor — these rates being the same 
as used in previous illustrations. The labor 
of making cores is not included in the figures, 
as for the purpose of illustration it was 
deemed advisable to consider simply the 
work of moulding, which would include the 
work of setting the cores, making it an easy 



CORRECT BURDEN" APPORTIONMENT 



289 



matter, in using charts of this nature, to add 
the core labor to any of the total costs. 

The conclusions that can be arrived at 
from a study of these charts are, first, that 
the various methods are correct at the point 







Li 


4.75 


























5.01 
1.45 






X 


l\ 






























*\ 


\\* 3 






























> 

8.40 








L 

I 


n 1-Coc 
ne 8-Co 


to with 
Is with 


hrd»n 
Borden 


ppOTtlo 

pportlo 


ed to to 
ed lo 10 


Z. 


id produ 


stive la 










J.6S 1 


.8.88 




I 


i»3-Co 


U vlU) 


Borden 


spportlo 




roductl 


t labor 














8.95 




j.98 
8.01 


1.50 


8.16 


8.18 


8.09 


8.01 


105 


8.04 


8.03 


8.02 












1.04 


1.M 


1.64 


US 


_Jj65 


1.59 


1.53 


1.5J 






W4_ 


















1.54 


1.47 


1.48 


"~ 1.85 




1.84 


1.81 


1.(9 


1.87 


.50 
































































91 


» 400 «O0 800 I0W 1500 1400 16O0 1800 9000 8*00 9400 8* 


W 980 
ttagaz 


lb. 
lie 



FIG. 30. TOTAL COSTS (MATEKIAL, PKODUCTIVE LABOR, AND 

BURDEN) FOR DIFFERENT WEIGHTS PRODUCED 

PER MAN PER DAY. 



where the lines cross; but that to the right 
of the intersection, the burden and total 
costs, per 100 pounds, on the direct-labor or 
direct-labor and tonnage methods of appor- 
tionment, decrease as the amount per man 
per day increases; while to the left of the 
intersection, the costs increase as the product 



290 MAXIMUM PRODUCTION" 

per man per day decreases, while it will be 
seen that from Figures 28 and 29 the burden 
costs on the tonnage basis are the same, re- 
gardless of whether 200 pounds or 2,000 
pounds are produced per man per day; this 
explains the slight increase and decrease of 
the cost as shown by line 1, Figure 30. The 
direct-labor or the compromise method con- 
siders that the direct labor is in a sense the 
real investment on which success or failure 
depends, for the reason that, as a rule, the 
more producers there are at work, the greater 
will be the production and the lower the 
costs, while costs increase and production 
decreases as the number of producers de- 
crease. Consideration is given to the great 
variety of work in a foundry, making the 
costs of both light and heavy work about 
what they should be, instead of too low in one 
case and too high in the other. 

The value of Figure 30, to those who de- 
sire to know instead of guess, will be appar- 
ent after due consideration, and as it is pos- 
sible to plot such a chart from the records 
of any foundry, the rules given on pages 292, 
293, may be found interesting as well as help- 
ful in determining the values for chart- 
ing. With figures from your own records, 



CORRECT BURDEN APPORTIONMENT 291 

substituted for the values shown in Figure 
30, you will be surprised at the margin of 
difference between the three methods. The 
costs of good castings at 2,200 pounds per 
man per day, from Figure 30, are shown as 
$2.04, $1.48, and $1.34 per 100 pounds, while 
at 200 pounds the costs are $3.40, $4.48, and 
$4.75 per 100 pounds, while further all three 
lines cross at $2.50 per 100 pounds for 500 
pounds per day per man. What does the 
chart covering your own work show you? 
From Figure 30, or from your own chart, it 
is evident that all three methods cannot be 
right; and as the inaccuracy of the tonnage 
method of apportionment has been demon- 
strated, it leaves only two others to choose 
from. 

Eliminating from our burden those 
items which are more proportionate to the 
increase or decrease in the production, we 
have left those items which are proportionate 
to direct labor; so that we have, by this 
process, also demonstrated that direct-labor 
apportionment is incorrect, although it would 
be far better to use this method than ton- 
nage apportionment — leaving only one meth- 
od, apportionment to tonnage and direct 
labor. 



292 MAXIMUM PRODUCTION 



Tonnage Basis. 

Expenses 



Weight of Castings Produced 



= Eate per 100 lb. 



Direct-Labor Basis. 
Expenses 



= Bate in Per Cent. 



Productive Payroll 

Tonnage and Direct-Labor Basis. 

Expenses Proportionate 
to Tonnage 

= Bate per 100 lb. 



Weight of Castings Produced 

Expenses Proportionate 
to Direct Labor 

= Bate in Per Cent. 

Productive Payroll 

Bules for Apportioning Burden at the Rates 
Above. 

W = Weight produced per man per day. 
M = Metal cost. 

L = Amount paid to moulder per day. 
B x = Burden on tonnage. 
B 2 = Burden on direct labor. 

B 3 = Burden on tonnage (A) and direct labor (B). 
C t = Cost per 100 lb. on tonnage apportionment. 
C 2 = Cost per 100 lb. on direct-labor apportionment. 
C. ; = Cost per 100 lb. on tonnage and direct-labor 
apportionment. 



correct burden apportionment 293 

Eules eor Apportioning Burden Eates 

Tonnage Basis. 
(WXM)+L + (WXB 1 ) 



W 

Direct-Labor Basis. 
(WXM)+L + (LXB 2 ) 

W 



= C ± . 



c 2 . 



Tonnage and Direct-Labor Basis. 
(W X M)+ L +(W X B 3 A) + (L X B 3 B) 

W 



= CL 



As the purpose of this chapter was to 
start our foundation before commencing the 
structure, we can with safety . decide on this 
latter method as being the basic element 
about which a system of foundry costing can 
be created; and with the matter of burden 
apportionment disposed of, knowing that we 
are right in principle, we can take up the 
elements entering into burden construction, 
which will be the purpose of the chapter to 
follow. 



Chapter XIV 

ELEMENTS OF FOUNDRY PRODUCTION 
COSTS 

]\/r AINTENANCE of price never implies 
•*■*•*- a maintenance of profit. Careful 
buying may result in a lower cost for direct 
materials, and proper supervision may re- 
duce the cost per 100 pounds for direct la- 
bor, but the best of management cannot ex- 
pect to reduce the overhead expenses or 
" burden' ' in proportion to the reduction in 
the volume of production. As a result we 
find burden costs increasing as the output 
decreases, this increase affecting profit, as 
the following will show : 

a b c D 

Monthly Tonnage 250 200 150 100 

Monthly burden $5,000 $5,000 $4,000 $4,000 

Direct material per 100 lb $1.00 $1.00 $1.00 $1.00 

Direct labor per 100 lb .75 .75 .75 .75 

Prime cost $1.75 $1.75 $1.75 $1.75 

Burden per 100 lb 1.00 1.25 1.40 2.00 

Total cost per 100 lb $2.75 $3.00 $3.15 $3.75 

Selling price per 100 lb 3.00 3.00 3.00 3.00 

Profit per 100 lb .25 

Loss per 100 lb .15 .75 

Per cent, of burden to direct labor 133| 166| 186| 266§ 

294 



FOUNDRY PRODUCTION COSTS 295 

It can be seen from this table that the item 
of "burden' ' has considerable to do with the 
amount of profit, that there is a certain point 
in the amount produced where income bal- 
ances cost, and that profits as well as losses 
begin from this point. Do you know where 
it is in your business? 

A shrewd manager recently stated that 
his designer once handed him the design cov- 
ering a proposed addition to one of the main 
factory buildings, with the petition that he 
approve it at once so that the work could be 
started, stating that the plan as set forth 
by the design had been looked over by sev- 
eral and approved by them. The manager 
looked at it for a moment and laid it on 
his desk with the remark that he would de- 
cide later in the day as to its merits. This 
rather incensed the designer, who stated that 
he felt the manager qualified to reach a de- 
cision from the facts as set forth by the de- 
sign, and that the desire to postpone the de- 
cision was really a reflection on his ability 
as a designer. The manager replied by say- 
ing that as far as he could see, the design 
covered the ground in a satisfactory man- 
ner ; but that he was less concerned with what 
was shown on the design than he was with 



296 MAXIMUM PRODUCTION 

what had not been shown at all, which would 
have to be considered before an intelligent 
decision could be reached. The manager told 
me that in going over the design later in 
the day, he found that it failed to consider 
several important points — that it did not 
take into consideration the future growth 
and expansion of the business ; consequently 
the design had to be revised, the revision 
eventually saving the company in question 
considerable money, due to nothing but a 
search for points that had not been covered. 
What you are doing is apparent and evi- 
dent; but it is what you are not doing that 
should receive your careful attention. Ap- 
point yourself a court of investigation, issue 
to yourself an order to show cause why your 
methods should not be discarded on account 
of their inability to secure you, through their 
use, maximum results at a minimum outlay. 
In the preparation of your defense, you will 
undoubtedly be surprised at the large amount 
of information you will gather as you inves- 
tigate the merits of your methods. You may 
start out with the feeling that they meet all 
requirements, but in actually defending them 
you will begin to see that here, there, and 
elsewhere there are weak places — strings 



FOUNDRY PRODUCTION COSTS 297 

which lead to nowhere in particular, points 
not covered at all, inaccuracies, and many 
other faults which render efficient operation 
out of the question. Even though you find 
but few serious faults, you will discover 
enough to warrant the investigation. 

Success in any branch of endeavor does 
not just' "happen," but is rather the result 
of intelligent oversight and supervision. If 
the owner of a foundry business could be the 
moulder, coremaker, melter, business getter, 
bookkeeper, and executive combined, all 
would be well; but as this is impossible, the 
foundry executive must depend upon as in- 
telligent an assistance as is possible to secure 
— succeeding or failing, according to the ef- 
ficiency of this assistance. Methods, men, 
clerks, etc., are simply "tools," which can 
be used to decided advantage or to no real 
purpose, at the will of the executive, and it 
should be his duty to see to it, first, that 
these tools are what they should be, and sec- 
ond, that they are used to advantage. This 
duty the executive owes to himself, to his 
business in particular, to his industry in 
general. 

Looking at the matter from a standpoint 
purely financial, expenditures are of every 



298 MAXIMUM PRODUCTION - 

conceivable kind, and need the most careful 
watching in order that the returns shall in- 
clude a fair margin of profit. If you pur- 
chase a knife at a hardware store for 75 
cents and induce some one to purchase it 
from you for $1.00, you have made 25 cents 
on your investment, or 33 1-3 per cent. If 
you purchase pig and scrap irons, coke, the 
services of moulders, core makers, cleaners, 
laborers, supervision, clerical help, materials, 
and supplies, and sell the resulting product 
of this investment to several people, you 
must see to it that you charge each one 
enough to cover your investment and at the 
same time allow yourself a margin for 
your efforts. If, after taking care of this 
investment, you are able to deposit a 
reasonable amount to your credit, you have 
a right to feel that you have successfully 
conducted operations. This success is an ef- 
fect; something contributed to it, and what 
this something was and why it assisted you, 
is entitled to more than passing attention, 
for if you can ascertain the reasons and 
properly classify, tag and file them away for 
future reference, you have at your disposal 
a means of forestalling disaster. If, on the 
other hand, you had found, after meeting 



FOUNDRY PRODUCTION" COSTS 299 

your obligations, that you were on the wrong 
side of the books, you would, without any 
question, want to know what the causes were ; 
but unless you had at your command some 
means for assisting you in your search, you 
would be forced to spend considerable time 
in an endeavor to pick past performances to 
pieces before locating your trouble, and the 
chances are that at best you would get only 
a general idea of what you desired to ascer- 
tain. 

A man in the act of putting his hand in 
his pocket for his knife was asked why he 
did so. He replied by saying that he did not 
know, but believed that his head told his hand 
to do so. When asked why his head suggest- 
ed such a procedure, his reply was, "my 
head knew that the knife would not come to 
my hand, so it sent my hand after the knife. ' ' 
Putting this same bit of logic in another way, 
we have — "details will not come to the execu- 
tive, so the executive must send something 
after the details." 

Expenses (details in the aggregate) are 
either conservative or beyond all reason — 
legitimate or illegitimate, and the executive 
must provide himself with some method 
which from time to time will acquaint him 



300 MAXIMUM PRODUCTION - 

with these details properly classified, so as 
to enable him to keep his fingers on the pulse 
of the business and ascertain its condition. 
Chemistry of bodies undertakes their resolv- 
ing into component parts, while ' ' Chemistry 
of Costs" undertakes the resolving of facts 
and information into the elements necessary 
for arriving at result-producing conclusions. 
It is evident to all, however, that we cannot 
separate that which has not been grouped, 
hence the necessity for logically joining to- 
gether the pertinent details of a business. 
This joining or grouping we will term " syn- 
thesis,' ' which may be defined as: 

The process of automatically group- 
ing together the various details of like 
nature, which, when properly arranged 
and classified, will show, at stated 
periods, what has been expended or ac- 
complished. 

The resolving of results, which we will 
term "analysis" may be defined as: 

The process of separating and placing 
by themselves the various details of like 
nature, which when contrasted or com- 
pared with the details of the same nature 
for previous periods, will enable the 



FOUNDRY PRODUCTION COSTS 301 

executive, through the instrumentality of 
thought and deduction, to determine 
whether results are as they should be or 
not, or to reach a definite conclusion re- 
garding a policy. 

It has been well said, "complexity breeds 
perplexity." This is especially so in the 
case of a foundryman who has been the re- 
cipient of repeated reminders, in one form 
or another, that things are not as they 
should be. How low can I consistently bid? 
Where is my money going! What can I do 
at different productions! What is my real 
efficiency! These are some of the questions 
that the foundryman will ask himself, real- 
izing that to turn a loss into a profit, or to 
increase his profits, he must either increase 
his prices or decrease his cost of producing 
castings; but as competition is such as ad- 
mits of no increase in prices, his operation 
is the something upon which he must concen- 
trate his attention. He finds, however, that 
in the absence of a well-organized means for 
furnishing pertinent details this information 
can be given to him only in a general way, 
and that it will be rather a difficult task to 
answer the self-imposed questions to his en- 
tire satisfaction. He therefore determines to 



302 MAXIMUM PRODUCTION 

find out what he wants to know, but is con- 
fronted with what seems to him to be a prob- 
lem more or less complex. As a starting 
point, however, he decides to arrange for a 
careful monthly accounting of his expendi- 
tures, giving the various details proper con- 
sideration and bearing in mind that there are 
three principal elements in production cost 
— A — Materials, B — Labor, C — Expenses — 
he sets out, in a receptive mood, for impres- 
sions to assist him in his work, making 
proper notations as he decides on methods 
of procedure. 

In the first place, he notices, in going 
through the foundry at casting time, that he 
has certain materials going through a melt- 
ing process before castings are produced, 
these materials being the pig irons, pur- 
chased iron and steel scraps, his own or home 
scrap (comprising bad castings made in the 
shop, gates, sprues, shot and over-iron), and 
the coke necessary to melt the iron. He 
knows that in the core room they are using 
a coke inferior to that charged into the cu- 
pola, and that to operate his plant he is 
forced to buy coal for power. Earlier in the 
day, when the moulders and core makers 
were putting up their work, the fact that 



FOUNDRY PRODUCTION" COSTS - 303 

sand was used by them suggested the two 
kinds used — moulding and core sands; also 
that a miscellaneous lot of materials were 
being used by the men throughout the plant, 
such as chaplets, hammers, brooms, brushes, 
facing, oils, iron and wire, bolts and nuts, 
etc., all of which he decides to call " stores,' ' 
before they are delivered to the men and 
' ' supplies ' ' when delivered to them. To con- 
trol his item of materials properly, he de- 
cides that it can best be handled by giving 
each kind of material a separate number, 
opening an account with it on his books, 
charging it with what is received and credit- 
ing it with whatever is consumed, arranging 
at the same time to take care of adjustments 
that may be necessary, the following being an 
exhibit of his material accounts: 
Account Number. Name of Account. 
100 to 114 Various pig irons purchased. 

115 Scrap iron — purchased. 

116 Scrap steel — purchased. 

117 Home scrap — Bad castings and re-' 

melt. 

118 Core sand. 

119 Moulding sand. 

120 Foundry coke. 

121 Stock coke. 

122 Coal. 

123 Stores. 

130 Material adjustments. 



304 MAXIMUM PRODUCTION" 

In studying the conditions more closely, 
lie observes that there are many things being 
done by his men, which, if classified and 
tagged, wonld provide a means for acquaint- 
ing him with the channels through which his 
money passes. He notices laborers digging 
pits, ramming up, and in other ways assist- 
ing the moulders; that some of them have 
regular helpers; that there are apprentices 
at work; that certain men are operating 
moulding machines, and that a part of this 
work which he calls "moulding" is given up 
to cutting sand, pouring off, and shaking out. 
The moulding process naturally suggests 
core making as a separate operation, while 
the cleaning of the castings suggests an- 
other, and as he notices that considerable 
chipping is necessary before castings are in 
a condition for inspection and shipment, he 
decides that it would be well for information 
purposes, to keep this item separate from 
the cleaning of castings. 

He carefully watches the laboring men 
working around the cupola in the yard, 
around the shops, at night getting out the 
work, etc., making notes as he does so ; he 
sees that considerable is expended to replace 
castings that have not been accepted by the 



FOUNDRY PRODUCTION COSTS 305 

inspector, which, according to his way of 
looking at it, is information he should have 
in deciding as to the efficiency of his men; 
and, while he knows that he expends quite 
a little for supervision and clerical work, he 
decides in favor of keeping this item sepa- 
rate so as to tell, periodically, just what this 
amounts to, without having it looked up for 
him. As before stated, he has noticed that 
quite an amount of miscellaneous materials 
is being used by the men around the plant, 
and as it is his desire to place each depart- 
ment upon its own footing, he concludes to 
charge them with the supplies they use in a 
given period of time, which information he 
can use for purposes of comparison and 
analysis, in this way perhaps reducing the 
consumption of the indirect or expense ma- 
terials. 

He finds it necessary to repair one of the 
factory buildings ; this suggests a logical di- 
vision of the expenditures for maintaining 
his plant, instead of depending upon one 
total at the end of the year, which really tells 
him nothing regarding where the money 
went and what required the most or repeated 
repairing or replacing. As he has several 
departments, such as his stable, power plant, 



306 MAXIMUM PRODUCTION 

pattern, machine, carpenter and blacksmith 
shops, pattern storage and shipping rooms, 
he decides in favor of keeping separate the 
expenses of operating them, so as to enable 
him to keep in closer tonch with the details 
of his business. 

In watching his shop operations, he ob- 
serves that some lifting plates are being 
made in order to facilitate the making of a 
j)articular order ; this suggests to him an ac- 
count that would tell him what it costs to rig 
up for special or new work. He decides to 
charge this expense for rigging against the 
work necessitating the expenditures — as a 
direct charge — at the same time providing 
a place in his expense account for this item, 
apportioning to his product the difference 
between the total expenses and the rigging 
expense, the advantages of which are that 
while each order is charged with its proper 
rigging cost, the rigging expense is in total 
in a place by itself — in this way facilitating 
study and analysis ; and as it appears in the 
burden statement as a memorandum charge 
only, he is in a position to take this expendi- 
ture into consideration when estimating on 
new or special work. 

The item of salaries he divides into officers ' 



FOUNDER PRODUCTION COSTS 307 

and office salaries; travelling expense into 
sales travelling and general travelling; dona- 
tions and dues perhaps amount to enough 
to warrant him in keeping this item sepa- 
rate, and in this way he goes through each 
class of expenditure like taxes, insurance, 
depreciation, legal expense, office expense, 
commissions, allowances, etc., but before fin- 
ishing his preliminary work, he happens to 
see some credits to customers for defective 
castings returned, and, while heretofore he 
has credited his customers and charged his 
sales— thereby reducing his sales or revenue 
account — he decides to open an account which 
he calls "defective castings,' ' crediting his 
customers the same as before, but charging 
his scrap account with the scrap value of the 
castings returned and his defective castings 
account with the difference between the scrap 
value and the invoice amount. He decides 
this way because first of all he wants some 
means that will bring to his attention, auto- 
matically, the amount of defectives returned, 
so that he may concentrate his endeavors 
along the lines necessary to keep the item 
down to as low a figure as possible, and be- 
cause it is hardly fair to reduce the sales of 
one month by work that was credited to the 



308 MAXIMUM PRODUCTION 

sales account several months before. If 
the sales this month are $50,000, the business 
is entitled to this credit, despite the fact 
that castings to the invoice value of $2,000, 
invoiced three months ago when the sales 
were $40,000, are returned this month. We 
cannot reduce the sales of three months ago ; 
the defectives returned have nothing what- 
ever to do with this month's business, and 
as the $2,000 in credits to the customers is a 
loss, less the scrap value, the logical plan is 
to place this item where it will plainly show 
as a loss. In effect both methods are the 
same as regards "net income"; for by charg- 
ing sales with returns, we reduce income but 
allow costs to remain as they are, while by 
charging cost with the returns, we increase 
cost but allow income to remain as it 
stands, so that the net income would be alike 
in either case. It seems, however, that there 
is more justice in the latter method with 
the decided advantage of providing the 
executive with the best kind of danger signal. 
After deciding on the various items that 
he wants to keep track of, the foundryman 
opens an account with each one, giving each 
an account number to which can be posted 
the various expenditures. His first consid- 



FOUNDRY PRODUCTION COSTS 309 

eration, after taking care of his materials, 
as was explained heretofore, is to separate 
his labor into "direct labor' ' and "expense 
labor" — under the first classification plac- 
ing: 

Moulding. — Account No. 150 — which is to include 
all time of: 
Moulders. 
Moulders' helpers. 
Apprentices. 

Moulding-machine operators. 
Laborers digging pits. 
Laborers ramming up. 
Cutting sand. 
Pouring off and shaking out. 

Core Making.— Account No. 151 — which is to in- 
clude all time of: 
Core makers. 
Core makers' helpers. 
Oven tenders. 
Mixers and pasters. 

Under the second classification — expense 
account — he will include: 

Cupola Labor. — Account No. 152— to include all 
labor : 

Getting materials from yard to charging plat- 
form. 
Weighing and placing charges. 
Taking bad castings and remelt to charging 
platform. 



310 MAXIMUM PRODUCTION 

Cupola Labor. — Account No. 152 (Continued ) 
Charging and tending cupolas. 
Breaking stock. 
Cleaning and daubing ladles. 
Cleaning and preparing cupolas for each heat. 

Cleaning. — Account No. 153 — to include all labor: 
Cleaning and grinding castings. 
Tending rattlers. 
Pickling castings. 
Using sand blast. 

Chipping. — Account No. 154 — to include all labor 
chipping and getting castings in condition for in- 
spection and shipment. 
Handling Materials. — Account No. 155 — to in- 
clude labor unloading, stacking and piling of: 

Pig and scrap irons. 

Coal and coke. 

Sea coal. 

Fire clay and brick. 

Limestone. 

Core flour. 

Lumber and slab wood. 

Moulding and core sands. 

Other materials not specified above. 

Yard. — Account No. 156 — to include labor loading 

dirt cars, cleaning up yard, etc. 
Shop Supervision and Clerical. — Account No. 
157 — to include salaries and wages of: 
Superintendent. 
Foremen. 
Shop clerks. 
Eeplace Labor. — Account No. 158 — to include 
labor in foundry or core room replacing work 
lost or extra work done on account of causes other 
than faulty design or construction of patterns. 



FOUNDRY PRODUCTION COSTS 311 

Foundry General. — Account No. 159 — to include 
time of all laborers (when not acting as moulders 7 
helpers) working around foundry or core room: 
Cleaning up floors. 
Carrying iron. 
Shifting weights. 
Going after supplies. 
Carrying flasks, patterns and cores. 
Time of— 
Watchman. 
Crane men. 
Any incidental work not specified above. 

Night Gang. — Account No. 160 — to include all 
time of laborers: 

Taking out castings. 
Placing flasks. 

Eemoving gaggers and clamps from sand. 
Fixing sand and getting floors in condition for 
use by moulders when they arrive in the morn- 
ing. 

The third element — expense — is divided 
into Supplies, Maintenance, Departmental, 
Miscellaneous Shop and the Commercial ex- 
penses, as follows: 

Supplies. 

Foundry Supplies. — Account No. 165 — to include 
all supplies used by the foundry which cannot be 
charged directly to any one order such as: 

Moulding sands, charcoal, stock coke, brushes 
and brooms, pails, bellows, files, nails and 
spikes, hammers and hammer handles, torch 
oils, chaplets, riddles, shovels, iron and wire, 



312 maximum production- 

Foundry Supplies. — Account N T o. 165 (Continued) 
facings, parting, bolts, nuts, screws, buckets, 
torches, wicking, cement, mallets, sledges, 
wheel barrows, waste and any other incidental 
materials used as supplies in the foundry. 
Core Eoom Supplies. — Account No. 166 — to in- 
clude all supplies used by the core room which 
cannot be charged directly to any one order, such 
as: 

Stock coke, moulding sand, core sand, core oils, 
molasses, paper, bolts and nuts, files, slab 
wood, wire and rods, core wash and core com- 
pounds, flour, gravel, brushes and brooms, 
nails, bellows, wheel barrows, wax tapers and 
other miscellaneous supplies . used by the core 
room. 
Cupola Supplies. — Account No. 167 — to include all 
supplies not otherwise chargeable, such as: 

Sand, slab wood, alloys, gravel, clay, limestone, 
wheel barrows, shovels, coke forks, coke bas- 
kets, brooms, tapping bars and any other ma- 
terials used as supplies around the cupola. 

Cleaning Eoom Supplies. — Account No. 168 — to 
include supplies, such as: 

Brushes, shovels, wheel barrows, brooms, chisels, 
hammers and hammer handles, carbo blocks, 
etc. 

Maintenance. 
Buildings and Eeal Estate. — Account No. 170 — 
to include all labor spent and materials used in re- 
pairing : 

Buildings, roofs, fences, sidewalks, tracks, etc. 
Plant Equipment. — Account No. 171 — to include 
all labor spent and materials used in repairing: 
Cupolas, blowers, moulding machines, cranes, 



FOUNDRY PRODUCTION COSTS 313 

grinding, rattling and sand-blast machinery, 
elevators, air equipment, pattern, machine, 
carpenter and blacksmith-shop equipments, 
the stable equipment, etc. 
Power and Transmission. — Account No. 172 — to 
include all labor spent and materials used in re- 
pairing : 

Boilers, engines, compressors, dynamos, lights, 
line and counter shafting, boxes, hangers, 
belts, pulleys, brackets, etc. 
Cast Equipment. — Account No. 173 — to include all 
labor spent and materials used in making : 

Stars, clamps, gaggers, braces, bench and flask 
weights, etc. 
Patterns. — Account No. 174 — to include all labor 
spent and materials used in repairing patterns, also 
replacing patterns broken. This account is to 
cover work that is not chargeable to customers. 
Flasks. — Account No. 175 — to include all labor and 
material used in repairing burned, broken or worn 
out wood flasks, wood flask bars, also broken iron 
flask parts. 

Departmental. 

Stable. — Account No. 180 — to include time of team- ' 
sters and those employed about stable, also feed, 
bedding, horseshoeing and supplies used. 

Pattern Shop. — Account No. 181 — to include labor 
and materials that cannot be charged direct to 
some other account, also pattern-shop supplies. 

Machine Shop. — Account No. 182 — to include labor 
and materials that cannot be charged direct to 
some other account, also machine-shop supplies. 

Carpenter Shop. — Account No. 183 — to include 
labor and materials that cannot be charged direct 



314 MAXIMUM PRODUCTION 

Carpenter Shop. — Account No. 183 (Continued) 
to some other account, also carpenter-shop sup- 
plies. 

Blacksmith Shop. — Account No. 184 — to include 
labor and materials that cannot be charged direct 
to some other account, also supplies used by the 
blacksmith shop 

Power Plant. — Account No. 185 — to include time 
of engineer and fireman and any other labor used 
in the boiler and engine rooms, also coal, oils, 
compound, waste, tools, etc. 

Pattern Storage. — Account No. 186 — to include 
time of those in charge of the pattern storage as 
well as any supplies used in same. 

Shipping Eoom. — Account No. 187 — to include 
labor in shipping room, boxes or barrels (made or 
purchased) with which to ship castings as well as 
any supplies used in same. 

Miscellaneous Shop. 

Eigging. — Account No. 190 — to comprise the rig- 
ging or special equipment made for some particu- 
lar customer or work and to include time of mould- 
ers, core makers, pattern maker or carpenter or 
any other labor applied to this particular class of 
work and to also include cost of metal used, and 
supplies like bolts, nuts, screws, rods, rings, etc. 

Taxes. — Account No. 191 — (*). 

Insurance. — Account No. 192 — (*). 

Depreciation. — Account No. 193 — (*). 

Analysis Expense. — Account No. 194 — to include 
expense of operating chemical laboratory, such as 

* Self-explanatory. 



FOUNDRY PRODUCTION COSTS 315 

salary of chemist, supplies used, etc., or the 
amounts paid to outside chemists for metal 
analysis. 

Commercial — Administrative. 

Officers' Salaries. — Account No. 200 — salaries of 

the executive officers of the company. 
Office Salaries. — Account No. 201 — salaries and 
wages paid to heads of departments, clerks and 
stenographers. 
Legal Expense. — Account No. 202 — (*). 
Interest and Discount. — Account No. 203 — (*). 
General Traveling Expense. — Account No. 204 
— all expense of traveling, having nothing to do 
with the selling of product. 
Telephone, Telegrams and Postage. — Account 

No. 205— (*). 
Office Expense. — Account No. 206 — to include 
such items as : 

Pencils, pens, stationery, forms, rubber bands, 
pins, ice, inks, brooms and dusters, folders 
and other miscellaneous office supplies. 
Donations and Dues. — Account No. 207 — to in- 
clude such items as : 

Subscriptions to magazines, association dues, 
gifts for charitable and other purposes. 

Commercial — Selling. 

Salaries of Salesmen. — Account No. 215 — (*). 

Sales Traveling Expense. — Account No. 216 — to 
include expenses for traveling when expended for 
the purpose of selling the product of the plant. 

Commission. — Account No. 217— (*). 
* Self-explanatory. 



316 MAXIMUM PRODUCTION 

Sales Freight. — Account No. 218 — to include pre- 
paid freight or express charges on shipments to 
customers. 
Allowances. — Account No. 219 — to include credits 
given to customers when they do not come under 
the head of credits for defective material or in- 
voice corrections. 
Defective Castings. — Account No. 220 : 

A — to be charged with castings returned from cus- 
tomers at invoice prices, less scrap value. 
B — to be charged with difference between scrap 
and invoice values when castings are kept by 
customers. 
C — to be charged with castings scrapped after be- 
ing weighed and reported as good, at cost value 
less scrap value. 

These various items are in reality a num- 
ber of " magnets' ' which are ready to draw 
the various details to them automatically in 
such a manner as to show periodically the 
totals of the various accounts. It would 
hardly do, however, to list the various totals 
on an adding machine in order to arrive at 
the total cost, for two reasons: 

1 — Because analysis is facilitated only 
when the item of total cost is divided into 
the groups necessary to enable the executive 
fully to grasp the real significance of the 
grand total. 

2 — Because the various items vary widely 
in their nature. It is therefore necessary to 



> 
FOUNDRY PRODUCTION COSTS 317 

separate the items, as shown above, into their 
logical controlling elements ; but as the length 
of this chapter renders further elaboration 
out of the question, the discussion of the ele- 
ments entering into production costs will be 
concluded in the chapter to follow, which 
will show how the various items are grouped, 
how and why they are apportioned to 
product, etc. 



Chapter XV 

THE APPORTIONMENT OF FOUNDRY 
COSTS TO PRODUCTION 

^TOTHING is large or small except by 
-^^ comparison. When a man speaks of 
the judgment of another as being " sound," 
he has compared this man's judgment or his 
success either with his own or with that of 
other men of his acquaintance. When a man 
is called upon to decide regarding a policy, 
he compares the advisability of carrying it 
out along certain lines with that of carrying 
it out along opposite lines. When a man 
is called upon to decide between the 
choice of two vocations, he studies the possi- 
bilities in one as against those of the other. 
A lawyer, in summing up, compares his argu- 
ments with those of his legal opponent, while 
the jury, in turn, compare the arguments ad- 
vanced by the opposing lawyers. Before a 
man becomes a member of a church, he first 
compares creeds and beliefs ; before a man 
designs a machine, he compares the different 
318 



APPORTIONING COSTS TO PRODUCTION" 319 

ways he could construct it; before a man 
builds a house, he compares different styles 
of architecture — in fact, comparison seems 
to be a basic element of vastly greater im- 
portance than is at first apparent. 

It is no doubt evident to all that nothing 
is done, no move ever made, except through 
the instrumentality of an action of some sort, 
and that no one acts one way or another with- 
out first deciding as to the course to pursue — 
conclusion. Looking at comparison, then, as 
a basic element, it can be seen that after a 
comparison has been made but before a con- 
clusion can be reached and action taken, it is 
necessary for something to bring out the 
good features and eliminate the bad ones — 
to affirm or to deny— this something being a 
mental process — reasoning. Accomplishment, 
then, is an effect— the result of an efficient 
action, based on a logical reasoning applied 
to a thorough and complete knowledge of 
comparative elements. If this is true, it fol- 
lows that if our elements are incomplete or 
faulty, the reasoning and conclusions are 
bound to be illogical and the action a failure 
or at least inefficient. 

All this means a great deal to the business 
world, being of special significance to the 



320 MAXIMUM PRODUCTION" 

foundry industry; for in the conduct of a 
foundry business, success is dependent upon 
the course pursued by its management — 
action — which to result in accomplishment 
depends upon the reasoning applied to com- 
parative elements — analysis in other words. 
The lesson is plain. Study your business in 
a scientific manner; set up attainable stand- 
ards as to cost, expenses, production; then 
analyze the relation of actual performance to 
your standards. Intelligent action — accom- 
plishment — success, will follow as a natural 
result. 

The preceding chapter gave a suggestive 
outline of the comparative elements peculiar 
to the usual foundry enterprise ; this chapter 
will take these elements, which serve a two- 
fold purpose — first, the finding of costs; sec- 
ond, the facilitating of analysis — and re- 
classify them so that the exposition will not 
only be more comprehensive and efficient, but 
show correct apportionment to production as 
well. 

The conducting of a foundry business in- 
volves two things — the making or production 
of castings, and the sale or disposition of the 
castings produced — the shop being responsi- 
ble for the making or production, and the 



APPORTIONING COSTS TO PRODUCTION 321 

second element being a purely commercial 
transaction with which the shop has very 
little if anything to do, exercising no direct 
influence over the executive control and ad- 
ministration of the business; consequently, 
in justice to both interests, we must consider 
the following as being the principal divisions 
of the grand total of the elements entering 
into cost of production : 

1 — Shop Cost — the cost of making the 
product. 

2 — Commercial Cost — the cost of adminis- 
tering the business and disposing of produc- 
tion. 

Shop Cost is found to be made up of two 
kinds of costs, which we will term "Direct 
Cost," including those items which can be 
charged direct to specific production, such as 
iron, moulding, etc., and "Indirect Cost," in- 
cluding those items which cannot be applied 
direct, such as sand, supplies, supervision, 
laborers — the elements entering into Direct 
Cost being classed under the headings or sub- 
divisions of "Direct Materials," such as pig 
and scrap irons, etc., and "Direct Labor,' ' 
such as moulding and core making. 

The elements which go to make up Indirect 
Cost are also of two kinds — those which have 



322 MAXIMUM PRODUCTION" 

a tendency to increase or decrease as the 
volume of product increases or decreases, 
and those which do not seem to have this ten- 
dency; consequently, it is necessary to ob- 
serve this distinction in our calculations, and 
we will therefore divide "Indirect Cost" into 
(1), Tonnage Charge, and (2), Foundry 
Charge, the first being applied to product as 
an additional charge to the amount which it 
receives through Direct Material, the second 
being applied to product on the basis of 
Direct (or Productive) Labor. 

Commercial Cost, defined above as the cost 
to administer the business and dispose of 
product, should be divided into "Administra- 
tive," including all items of expense which 
enter into the successful management of the 
business, such as executive and office salaries, 
office expense, supplies, etc., and "Selling," 
including all expenses made necessary be- 
cause of the marketing of the product of the 
shops, such as salesmen's salaries and ex- 
penses, advertising, etc. 

From this it will be seen that we have six 
subdivisions of costs common to the majority 
of foundries: 

Direct Materials, 

Direct Labor, 



apportioning costs to production 323 

Tonnage Charge, 
Foundry Charge, 
Administrative, 
Selling. 

These control the numberless details pecu- 
liar to them, the subdivisions being in turn 
controlled by others : 

Direct Labor ) 

Direct Material [ makm ^ DlEECT CosT ' 

Foundry Charge ) _. 

Tonnage Charge [ makm ^ J ™^ T ^ost. 

Administrative ) , . „ ~ 

q I making Commercial Cost. 

Commercial Cost, combined with Shop 
Cost (Direct and Indirect Cost), make "To- 
tal Cost"; so that no matter what the execu- 
tive wants to scrutinize, whether the amount 
of sand or chaplets used, or the cost to sell 
the product — the cost to make the castings or 
the details regarding the shop expenses — he 
has a means of getting at what he wants to 
know automatically, all being arranged and 
classified for immediate reference. It is, 
therefore, necessary to reclassify the various 
cost accounts previously shown, according to 
the six subdivisions; Figures 31, 32 and 33 
show what each subdivision comprises, Fig- 



324 



MAXIMUM PRODUCTION 



ure 34 being an exposition of how they are 
merged into Total Cost and apportioned to 
product. 



Direct Materials 



DIRECT COST! D 




Pig Irons 

Scrap Iron or Steel 
^) Recovery 
Coke 
Material Adjustments 



Direct Labor 



Moulding 



Coremaking 



The Engineering Magazine 



FIG. 31. THE ELEMENTS ENTERING INTO DIRECT COST. 

Eegarding the suggested apportionment, it 
will be seen that Direct Material and Direct 
Labor, on account of their nature, are direct 
charges to production and are therefore eas- 
ily disposed of in costing. In Indirect Cost 
we have an element not capable of being 
handled so easily, for while there is abso- 
lutely no question regarding the advisability 




Shop Supervision and Clerical 

<^ Lab ° r 

^~0 Supplies 
Chipping 

Foundry General X> Buildings 
Maintenance 




Power Plant 

Stable 

Pattern Shop 
Q Machine Shop 

Carpenter Shop 

Blacksmith Shop 

Pattern Storage 

Shipping 

Rigging 

Taxes 

Insurance 

Depreciation-Shop 

Handling Materials 
Cupola ^^i! 

Yard Labor 
Replace Labor 
"O Night Gang 
Supplies 
Power Plant 
Maintenance 
Analysis Expense 



Plant Equipment 

Power and 
Transmission 
Cast Equipment 






Labor 
Supplies 



Foundry 
Coreroom 



Patterns 
Flasks 



The Engineering magazine 



32. THE ELEMENTS ENTERING INTO INDIRECT COST. 
325 



32G MAXIMUM PRODUCTION" 

of apportioning this element, part to product 
on the basis of tonnage and part on the basis 
of direct labor, there may be considerable 
question regarding the advisability of appor- 
tioning the various elements which made up 
this subdivision according to the manner out- 
lined in Figure 32. In determining to which 
class any item of Indirect Cost belongs, the 
relation of each one to the tonnage produced 
must be given consideration. If the tendency 
is for the cost of an item to increase or de- 
crease as the volume of the product increases 
or decreases, the item is a charge to produc- 
tion on the basis of tonnage. If this is not 
the case, however, the apportionment must 
be made on the basis of direct labor. 

Take, for instance, the item ' i Handling Ma- 
terial. ' ' Here we have an element that will in- 
crease or decrease with the tonnage produced, 
not proportionately, perhaps, but to some ex- 
tent at any rate, while the increased tonnage 
which necessitated this extra handling cost 
might have been accompanied by the expendi- 
ture of about the same amount of labor, ow- 
ing, perhaps, to a different line of work. This 
reasoning also applies to Yard and Cupola 
Labor. Eegarding Eeplace Labor, it is evident, 
though it does not always follow, that the 



APPORTIONING COSTS TO PRODUCTION 327 

greater the total of production the greater 
will be the labor expended to replace castings 
condemned in the foundry; for it is natural 
to expect that more castings will be lost and 
replaced when the production is 500,000 
pounds monthly than when it is only 200,000. 
From this it seems proper to include Han- 
dling, Yard, Cupola and Eeplace Labor in 
the Tonnage Chakge section. 

A foundry starting with a tonnage of 10 
tons daily will find that it will have to add 
more men to the force who take out the work 
at night when the tonnage increases to 20 
tons per day, so that it is proper to class the 
item Night Gang as a tonnage expense along 
with Foundry, Core Eoom and Cupola Sup- 
plies, which tend to increase as production 
increases, while to this same class can be 
added Maintenance of Flasks and Patterns, 
as these expenditures will be greater with a 
larger production than when the production 
is such as does not call into play so many 
flasks and patterns. As the power used is 
proportionate to the run of the cupola, the 
proper amount of the Power Plant charge 
should be included in the tonnage item along 
with Analysis Expense, which is included in 
this section, not so much because the expense 



328 MAXIMUM PRODUCTION 

is likely to increase as the production in- 
creases (depending, of course, on the variety 
of the work), but because of the fact that an- 
alysis is directly related to metal produced. 
Briefly reviewing, it will be seen, upon con- 
sideration, that the items mentioned may in- 
crease in proportion, or faster, or not as fast, 
as the increase in production; but the ten- 
dency is to increase, nevertheless, while the 
increase in the production may be the result 
of about the same amount of direct labor, 
although this increase could be accompanied 
by a greater relative increase or even a de- 
crease in this direct labor, all of which seems 
to indicate that apportionment of the items 
mentioned to the production on the basis of 
tonnage is perfectly logical. 

Let us consider for a moment the sug- 
gested apportionment to "Direct Labor." 
If the items have a tendency to increase in 
cost as the amount of direct labor increases ; 
or if, on the other hand, there is no relation 
between the two, and no relation between the 
cost of the items and the tonnage produced, 
then they are correctly shown in the exposi- 
tion. Take, for instance, Shop Supervision 
and Clerical. It stands to reason that the 
more producers there are at work the greater 



APPORTIONING COSTS TO PRODUCTION 329 

will be the need for supervision and clerical 
work, while with fewer producers less will be 
required, although the cost per dollar of di- 
rect labor will be greatest when a minimum 
number of producers are at work, because 
of the fact that supervision and clerical work 
cannot decrease in proportion to the decrease 
in the amount of direct labor expended ; they 
decrease as the amount of direct labor in- 
creases, until a point is reached when more 
supervision is required; and, as considera- 
tion will show that the same expenditure of 
direct labor might result in a large produc- 
tion one week and a small one in the week 
following, it is evident that the item men- 
tioned is more nearly proportionate to labor 
expended than to tonnage produced. 

The item of Labor and Supplies for the 
Cleaning Eoom, as well as Chipping, has 
been included in the expense apportionable 
to direct labor, although the labor of clean- 
ing and chipping can be charged direct to 
production, if the foundryman so chooses. 
It was included as shown for the following 
reasons. Consider, for instance, a small, 
complicated casting, which might weigh only 
500 pounds, taking the entire time of a moul- 
der for a day, as against a large, plain cast- 



330 MAXIMUM PRODUCTION" 

ing, made in the same time ; it is more than 
likely that the cleaning cost will be abont the 
same in both cases, while on the other hand 
a small, plain, easy-to-make casting could be 
cleaned quickly, while a large, complicated, 
difficult-to-make casting would take consider- 
able time for this operation. It seems, after 
watching the cleaning operation, that it bears 
a close relation to direct labor,' comparing 
the making and cleaning of complicated with 
complicated work and plain with plain work, 
although it does not follow from this state- 
ment that the relation is always proportion- 
ate. On account of this relation, however, 
and because of the fact that the entire cost 
of cleaning and chipping could not be ap- 
plied to product direct without considerable 
detail work, necessitating the charging of a 
part of the cost to Direct Labor and the bal- 
ance to Foundry Charge, it has been in- 
cluded as a labor apportionment item, not 
only for the sake of simplicity, but because 
in this way the executive is provided with a 
logical control of this expense. I know of 
an instance where by keeping separate the 
entire cost of the cleaning, the executive was 
enabled to reduce this expense, through com- 
paring it with his other elements, as well as 



APPORTIONING COSTS TO PRODUCTION 331 

with the same item for previous periods, 
which would not have been possible had part 
of the cleaning cost been in expense and part 
divided as Direct Labor, in small amounts, 
among the various jobs. 

As to Foundry General, it may be said that 
this expenditure is largely dependent upon 
the number of producers at work, regardless 
of the tonnage produced, although there 
might be times when it would be more nearly 
proportionate to tonnage than to labor — as, 
for instance, in cases where, because of 
change in work, about the same amount of 
labor might produce a considerably larger 
tonnage, necessitating additional shop labor. 
In most cases, however, the tendency is for 
this cost to increase or decrease with the in- 
crease or decrease in direct labor, for which 
reason it has been classed as a Foundry 
Charge expense. Eegarding the mainte- 
nance items, it should be evident that keep- 
ing the real estate and buildings, the equip- 
ment of the plant, etc., in proper condition 
really has nothing to do with the amount of 
the tonnage produced by the shops. Eepairs 
might be the lowest when production was the 
highest, or vice versa; in fact, deterioration 
might be greatest when there was no pro- 



332 MAXIMUM PRODUCTION 

duction at all. As a matter of fact, they 
might not bear much relation to the amount 
of direct labor, but as they are not items 
which increase or decrease with the tonnage 
produced, we must include them in the Foun- 
dry Chaege section, applying them to produc- 
tion on the basis of labor. As we arranged 
to charge a certain proportion of the power- 
plant cost to tonnage, we must include the 
balance in the Foundry Charge section along 
with the cost of various departments, stable, 
pattern shop, machine shop, carpenter shop, 
blacksmith shop, pattern storage, which must 
be conducted regardless of whether the 
amount of tonnage produced is 5 tons or 20 
tons daily, although these costs would very 
likely increase with the increase in the force 
of producers. 

Upon first consideration, it might seem as 
if Shipping belonged to the Tonnage Charge 
section, because of the fact that the shipping 
expense is sometimes greater with a large 
amount of tonnage than with a small amount. 
A momenta reflection will show, however, 
that it is possible for a large amount of la- 
bor to turn out, instead of large tonnage, a 
large production in the count of pieces, ne-' 
cessitating considerable shipping expense 



APPORTIONING COSTS TO PRODUCTION 333 

for gathering, tagging and shipping, so that 
in the strictest sense this term is propor- 
tionate to neither tonnage nor labor, and not 
being a tonnage charge, it must be placed 
in the labor section. As regards Eigging, it 
follows that the nature of the work being 
done, etc., really governs this expenditure, 
and that it might be greatest with a 
small tonnage or when the number of pro- 
ducers was not large, or vice versa, so that, 
like Shipping, this item really belongs in 
neither section, for which reason it has been 
placed in the labor section as a memorandum 
charge only, in order that Total Cost may 
show the total expenditure for rigging for 
comparative and estimating purposes, while 
the items Taxes, Insurance and Deprecia- 
tion, bearing, as they do, no relation to the 
increase in the tonnage produced, are appor- 
tionable, because of this fact, to Dikect La- 
bok. 

In considering the handling of Commer- 
cial Cost, all will agree that some means 
must be provided for taking care of it — that 
it is not a cost capable of direct charging, 
and must therefore be classed with the ap- 
portionable items ; and that in our search for 
a basis on which apportionment can be made, 



33i 



MAXIMUM PRODUCTION 



( Administrative /*" 




Selling Expense [ k 



^ O Officers 

Salaries <^T 

^^O Office 
Legal Expense 

Interest and Discount 

General Traveling Expense 

Telegraph and Telephone 

Postage 

Office Expense 

Donations and Dues 

Depreciation-Office 

Losses 

Advertising 
Salaries of Salesmen 
Sales Traveling Expenses 
Commissions 
Sales Freight 
Sales Discount 
Defective Castings 
Allowances 

The Engineering Magazine 



FIG. 33. THE ELEMENTS ENTERING INTO COMMERCIAL COST. 

we can find only two elements — Production 
and Sales. On the latter basis, the ratio be- 
tween the amount of Commercial Cost and 
the amount of the sales is ascertained and 
the selling price of the different orders mul- 
tiplied by the resultant percentage, the prod- 
uct being added to Shop Cost. Another 



APPORTIONING COSTS TO PRODUCTION 335 

method is to deduct monthly, from the reve- 
nue from sales, the Shop Cost of the sales, 
the difference being gross profit— the amount 
of net profit being ascertained by deducting 
the commercial expenses from the gross 
profits. There is no question that (as before 
stated) the difference between production 
and commercial costs is of sufficient impor- 
tance to warrant us in strictly observing this 
distinction. 

An analysis of the items which go to make 
up the administrative and selling expenses 
will show that the expenditures have to do 
with the past, present, and future — that some 
are concerned with sales, others with pro- 
duction or production and sales combined, 
and still others with neither production nor 
sales. The item "Donations and Dues," for 
instance, has nothing to do with production 
or sales, the past or the future. Some of 
the items in the selling expense division, like 
"Advertising and Salesmen's Salaries," are 
concerned with getting future production — 
others with what was done in the past, like 
"Commissions" and "Allowances." Items 
like "Telephone and Telegrams," "Post- 
age" and "Office Expenses," are likely to 
be as much concerned with what is being 



336 MAXIMUM PRODUCTION 

produced as with the work of making sales 
or taking care of the sales that have been 
made. The past cannot absorb that which 
belongs to the past ; we cannot hold the items 
belonging to the future until they shall be 
applied; it would be difficult to apportion 
to sales those items which belong to sales, 
and to production those which belong to pro- 
duction. It therefore seems, after briefly an- 
alyzing the make-up of the commercial ex- 
penses, that it would be best to make each 
month's production stand on its own feet by 
making it absorb the entire expense for the 
period, in this way converting all of the ex- 
penditures of a period into an asset ; for, on 
the assumption that we ship none of the cast- 
ings we might have made, at the end of the 
period they would appear in our resources as 
" Manufactured Castings'' at an amount 
equal to the cost of the material, labor, and 
expenses. On a basis of commercial expense 
apportionment to sales, a month's produc- 
tion would be charged to inventory at shop 
cost, and assuming that there were no sales 
from which to deduct the commercial ex- 
penses, these expenses would have to be con- 
sidered as a loss. A profit or a loss should 
show after sales are made,- not before, as the 



APPORTIONING COSTS TO PRODUCTION 337 

difference between the selling prices of what 
is sold and the cost of product, which is the 
result when inventory is charged with com- 
mercial as well as shop cost. 

A good casting is the result of a moulding 
process which involves the making and set- 
ting of cores — two distinct operations. A 
completed engine is the result of an assem- 
bling process which involves the machining 
of the parts — two distinct operations. 
Viewed in the light of the illustrations just 
cited, production is the result of a manufac- 
turing process which involves a commercial 
process — the administration of the business 
and the disposition of what is produced, 
without which production would be impossi- 
ble — two distinct operations. Manufacturing 
expenses bear a direct relation to production 
— the commercial expenses, an indirect; but 
production, nevertheless, is the underlying 
element with which any enterprise is con- 
cerned. 

We can apportion "Commercial Cost" to 
production in three ways — on tonnage, direct 
labor or shop cost. The method to choose 
should be one which will be fair to the com- 
pany, the shop management, and the work- 
men, and which will also point out to the 



338 MAXIMUM PRODUCTION 

executive what he should know to supervise 
and direct intelligently. This can best be 
accomplished by using direct labor as our 
basis for pro-rating; but as opinions count 
for nothing unless backed by some sub- 
stantial evidence, let us see if there is any 
logic in this assertion. In the first place, 
all will agree that direct labor is the true 
investment in any enterprise, for the reason 
that the more we expend for labor that actu- 
ally produces something, the greater should 
be the amount produced, regardless of how 
much material was used or the amount of the 
indirect expenses. It is also evident that the 
greater the number of producers at work the 
lower will be the relative overhead expenses 
or " burden,' ' while these will increase as the 
number of producers decreases, so that the 
relation of burden costs to the amount ex- 
pended for direct labor is too important to 
be lost sight of — the ratio between the two 
being an inverse one. If a workman pro- 
duces a large amount for a low labor cost, 
his production should absorb a lower pro- 
portion of the burden cost than that of one 
who produces the same amount at a higher 
labor cost, or a lower production at a high 
labor cost. If this is logical, then it is right 



APPORTIONING COSTS TO PPvODUCTION 339 




Dieect Material 
Dieect Laboe 

foundby chaege 
Tonnage Chaege 



Administrative Expense 



K ) Selling Expense 



Appobtionment 

"E" to Prodnct Direct "F" to Product Direct. 

"H" to Prodnct on Basis of Direct Labor as a Percentage. 

"I" to Product on Basis of Weieht of Castings (tonnage) Produced" 

"J" and "K"- Same as "H" 



The Enginee. ing Magazine 



FIG. 34. THE MAIN ELEMENTS OF PKODUCTION COSTS AND 
THEIR APPORTIONMENT TO PRODUCT. 

for us to make the product of each workman 
absorb the burden in proportion to the 
amount paid him for direct labor. In this 
way, each man will stand on his own feet, 
for the one' having the greatest production 
will absorb the lowest burden cost, and vice 
versa. 

The result to the management is this — 
work costing the most in direct labor will 
cost the most in burden, which is as it should 
be for furnishing the best means for accu- 
rate price determining, as well as a basis 
for determining the efficiency of the shop 



340 MAXIMUM PRODUCTION 

management and the workmen. A customer 
should pay the most money for castings cost- 
ing in direct labor the most to produce. If a 
mistake has been made in quoting, it will 
show in the form of a much smaller profit 
than anticipated, or perhaps in a loss, or in 
the form of an excessive profit — an over-esti- 
mation. If no mistake is made in quoting, 
however, and the amount of direct labor 
greatly exceeds what it should have been, it 
will not only show in the form of an increased 
direct-labor cost, but in the increased amount 
of burden absorbed, with the result that the 
total cost will be in excess of the price re- 
ceived, showing a loss for the executive to 
take up with the shop. 

Profits or losses will be what was made or 
lost; prices will be based on true costs; the 
product of a workman will bear no more or 
no less of the burden than its direct labor 
makes it stand; fluctuations will be noticed, 
as burden costs will rise or fall with the rise 
or fall in direct labor, so that after due con- 
sideration, I am of the firm opinion that the 
points brought out logically point to "Com- 
mercial Cost'' apportionment to production 
on the basis of "Direct Labor,' ' as being 
right and proper. 



Chapter XVI 

COST-APPOKTIONMENT IN VAEIOUS 
CLASSES OF FOUNDKIES 

A MANUFACTUEEK, whether making 
*- ^ castings or candy, is generally in- 
clined to the belief that he can derive no di- 
rect benefit from a discussion of proposed 
betterments, because of his "peculiar' ' or 
" complex' ' conditions, which, according to 
his way of thinking, call for specific treat- 
ment — if any betterment is necessary. 

There is, of course, no denying the fact 
that there are many cases where Jones puts 
into operation methods that are successful 
in the plant of Smith, and after a heart- 
breaking attempt to get things to run 
smoothly under the new arrangement, finally 
discards them for his old methods, with the 
result that any other innovations thereafter 
are frowned upon. As a matter of fact, no 
betterments can be introduced into any busi- 
ness, no matter how correct they may be in 
principle, if little attention is given to the 
341 



342 MAXIMUM PRODUCTION 

matter of their application to the existing 
conditions; and to this one defect of inap- 
plicability — a serions one, indeed — can be 
laid the failure of many a system that was 
no doubt correct as far as the principle was 
concerned. An improvement involves a 
change, although a change does not always 
imply an improvement; therefore, before a 
manufacturer plans any changes, he wants to 
feel sure that they are going to better his re- 
sults and still cover his conditions — he wants 
them right, both in principle and applica- 
tion. 

The three preceding chapters have dwelt 
upon correct burden apportionment ; the ele- 
ments entering into the burden ; their appor- 
tionment to production and the necessity for 
analysis. The suggested burden apportion- 
ment took into consideration the fact that 
some of the items were proportionate to 
direct labor, others to the tonnage produced ; 
that it was advisable to divide the burden 
into the elements necessary to give the execu- 
tive an intelligent grasp of all of the perti- 
nent details of his business when compared 
with standards ; and, although the suggested 
division might impress a manufacturer as 
being "too much detail,' ' the fact remains 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 343 

that we must know where to concentrate our 
attention before we can better results, and 
that compilations cannot anticipate whether 
information is going to be valuable or abso- 
lutely worthless. Therefore, it would be bet- 
ter to divide into three parts an item which 
could be carried under one heading, if by so 
doing there is any possibility that one of 
these subdivisions may point out the way, 
through analysis, to greater efficiency — the 
conditions to be covered largely governing 
the kind and number of accounts. Finally, 
we saw that analysis of "comparative ele- 
ments" was an absolute necessity, because 
it took into consideration the fact that first 
impressions are usually lasting, whether cor- 
rect or incorrect, and that it is an unwise 
policy to jump at conclusions unless we can 
see the conclusions. 

Granting the importance of analysis — the 
correctness of a burden apportionment part 
to labor and part to tonnage — and the neces- 
sity for a detailed division of what is ex- 
pended, the next feature a foundryman is 
concerned with is the consideration as to how 
his costs are to be absorbed by his produc- 
tion. In order to treat this phase of the sub- 
ject as intelligently as possible, it is neces- 



344 MAXIMUM PRODUCTION 

sary to divide the foundry industry into dif- 
ferent classes, as follows: 

1 — Jobbing Foundries — Foundries selling 
all their production to outside concerns. 

2 — Specialty Foundries — Foundries sell- 
ing all their production to the business of 
which they are a part. 

3 — Specialty Foundries Doing a Jobbing 
Business — Foundries selling part of their 
production to outside manufacturing enter- 
prises and the balance to the business of 
which they are a part. 

There seems to be little uniformity in 
foundries in the above classes when the mat- 
ter of the division of the production is con- 
sidered. Some foundrymen want it divided 
one way, while others have some other 
method of ascertaining the cost of different 
kinds of production; in fact, a half-dozen 
foundries in the same locality may have as 
many different ways of figuring. The fol- 
lowing are the principal divisions of the sev- 
eral ways possible for a f oundryman to treat 
his production, applicable to the three classes 
of foundries specified above : 

(a) Cases where a f oundryman is satisfied 
with simply the weight and cost of his pro- 
duction in total. 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 345 

(b) Cases where the production is classi- 
fied according to weight and is divided into — 

Total weight and cost of " light' ' work. 
Total weight and cost of " heavy" work. 

(c) Cases were the production is classified 
according to the principal methods of mould- 
ing, being divided into — 

Total weight and cost of loam work. 
Total weight and cost of dry-sand work. 
Total weight and cost of green-sand work. 

(d) Cases where the production is classi- 
fied according to the use of the castings pro- 
duced, being divided as follows (if we as- 
sume, for example, a concern manufacturing 
engines and boilers) — 

Total weight and cost of engine castings. 

Total weight and cost of boiler castings. 
Or, if the output consists of a varying line, 
such as the manufacture of steam and gas 
engines, boilers, and a special line of work 
such as laundry machinery, we can divide — 

Total weight and cost of steam-engine 
castings. 

Total weight and cost of gas-engine cast- 
ings. 

Total weight and cost of boiler castings. 

Total weight and cost of laundry-machin- 
ery castings. 



346 MAXIMUM PRODUCTION 

Or we can still further classify by taking the 
production of the steam-engine castings ac- 
cording to — 

Total weight and cost of beds. 

Total weight and cost of frames. 

Total weight and cost of wheels. 

Total weight and cost of cylinders. 

Total weight and cost of all other steam- 
engine castings. 

(e) Cases where the production is classi- 
fied according to the ivay the castings are 
made, being divided into — 

Total weight and cost of machine-made 
castings. 

Total weight and cost of hand-made cast- 
ings. 

(/) Cases where the production is classi- 
fied according to the weight and cost of each 
separate casting. 

(g) Cases where the production is classi- 
fied according to the total weight and cost of 
each customer's work. 

(h) Cases were the production is classi- 
fied according to departments in which they 
are made, as for example — 

Total weight and cost of bench-work cast- 
ings. 

Total weight and cost of side-floor work. 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 347 

Total weight and cost of main-floor work. 

(i) Cases where the production is classi- 
fied according to the various classes of 
weights, as for instance all castings weigh- 
ing from 200-400 pounds being treated as in 
a class by themselves. 

(j) Cases where the production is classi- 
fied according to the disposition, being di- 
vided into — 

Total weight and cost of castings made 
for our own consumption. 

Total weight and cost of castings made for 
sale to the trade. 

If space permitted, various combinations 
of the cases shown could be cited, as for in- 
stance, j and b could be combined, the cast- 
ings made for sale and consumption being 
in turn divided into the weight and cost of 
the light and heavy work. Care should be 
exercised before deciding on what case or 
combination of cases to use, as conditions 
(and conditions only) must govern the plan 
to follow. 

The following rules have been worked out 
in order that the calculations entering into 
the apportionment of costs to production 
may be more clearly understood, our known 
elements being — 



348 MAXIMUM PRODUCTION 

1 — Weight of castings produced. 
2 — Total cost of Direct Material. 
3 — Total cost of Direct Labor. 
4 — Total cost of Foundry Charge. 
5 — Total cost of Tonnage Charge. 
6 — Total cost of Commercial Cost. 

Eules for Kate Determination 

1. — To find the rate per 1,000 pounds of Direct 
Material, divide the cost in total of Direct 
Material by the tonnage produced. 

2. — To find the rate in per cent of Foundry Charge, 
divide the cost in total of Foundry Charge 
by the cost in total of Direct Labor. 

3. — To find the rate per 1,000 pounds of Tonnage 
Charge, divide the cost in total of Tonnage 
Charge by the tonnage produced. 

4. — To find rate in per cent of Commercial Cost, 
divide the cost in total of Commercial Cost 
by the cost in total of Direct Labor. 

5. — To find the rate per 1,000 pounds of Total Cost, 
divide the total cost by the tonnage produced. 

Apportionments. 

6. — To ascertain the cost of Direct Material, multi- 
ply the tonnage produced by the rate from 
Eule 1. 

7. — To ascertain the cost of Direct Labor, charge 
the proper amount direct. 

8. — To ascertain the Foundry Charge, multiply the 
Direct Labor by the rate from Rule 2. 

9.— To ascertain the Tonnage Charge, multiply the 

tonnage produced by the rate from Rule 3. 
10. — To ascertain the Commercial Cost, multiply the 
Direct Labor by the rate from Rule 4. 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 349 

After the rates have been determined, the 
following rules can be used for enabling the 
foundryman to cost correctly any classified 
production : 

EuLES FOR THE TREATMENT OF THE VARIOUS CASES. 

11. — Select from list prevously shown — cases a-j, 

the division desired. 

12. — Classify the production according to the di- 
vision selected. 

13.— Ascertain the Direct Material cost by using 
Eule 6 for each classification. 

14. — Post to each classification the correct amount 
of Direct Labor. 

15.— Apportion Foundry Charge by using Eule 8 

16.— Apportion Tonnage Charge by using Eule 9. 

17 - — Apportion Commercial Cost by using Eule 10 

18.— Add 13-17 inclusive. 6 

19.— For rate per 1,000 pounds of Total Cost use 
Eule 5. ' 

Eules 15-19 inclusive apply to each classification 
separately. 

Illustration. 

Values. Apportionment. 

Tonnage— 3,050 lb. Tonnage— 3,050 lb. 

Direct Material— $10.00 Direct Material.. .$30 50 

per 1,000 lb. Direct Labor .... 20 00 

Direct Labor— $20.00. Foundry Charge.. 25 00 

Foundry Charge — 125 Tonnage Charge.. 7.63 

per cent. 

Tonnage Charge— $2.50 Shop Cost $83.13 

per 1,000 lb. Commercial Cost. 7.00 

Commercial Cost — 35 

percent. , Total Cost $90.13 

Per 1,000 lb 29.55 



350 MAXIMUM PRODUCTION 

Through the use of the above rules, a f oun- 
dryman is in a position to determine the 
costs of his production, in total as in Case a, 
as one extreme (hardly to be recommended, 
however), or by each individual casting, as 
in Case /, as the other extreme. He would 
have, in any case other than Case a, a classi- 
fied cost of his production, the amount of 
detail work necessary to secure the costs 
depending upon the selection from the list 
of cases ; and, as outlined, the costing would 
take into consideration the fact that the pro- 
duction, though classified, was the output of 
a single department. 

If, however, the f oundryman found it nec- 
essary, because of his conditions, to obtain 
all the information possible to secure, it 
would then be necessary to divide the foun- 
dry into certain departments. Take, for in- 
stance, a foundry where a number of ma- 
chines are in use; where a considerable 
amount of bench work is done, but where 
the bulk of the work is light and heavy floor 
Work. It would then be well to divide the 
foundry into Machine, Bench and Floor de- 
partments, and each in turn could have its 
production classified according to one or 
more of the cases previously shown. To 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 351 

treat the foundry as made up of these three 
departments, it would be necessary to make 
a number of separations in the figures. The 
cost of Direct Material and Labor would be 
separated into the costs for the three de- 
partments, by divisions decided upon, while 
the other three items— Foundry Charge, 
Tonnage Charge, and the Commercial Cost, 
would have to be separated as far as possible 
into— First, the costs, which could be charged 
direct to the three departments, and second, 
the costs of a general nature which would 
have to be apportioned to the production of 
each department. 

A brief analysis of the costs accounts, 
which appeared in Chapter XIV, will show 
that there are several elements which could 
be charged direct to the departments ; others 
could be charged part to the departments and 
part to the "general" section, while still 
others would have to be included in the "gen- 
eral" section. Each individual case would, 
of course, determine the divisions, but in a 
general way the apportionment shown on 
pages 352, 353 would be representative of 
the items which would appear as direct, 
direct-general, and general charges. 

After the costing has been done along the 



353 MAXIMUM PRODUCTION 

lines suggested, it will be found that the 
departments are charged with the proper 
amount of Direct Material, Direct Labor, and 
a portion of the Foundry Charge, Tonnage 
Charge, and Commercial Cost, and in order 
that the production of the departments may 
absorb all the expenses, it will be necessary 
to distribute the remaining portion of the 
three latter elements in the " general' ' sec- 
tion, in such a manner as shall give to each 
department an equitable amount. To do this 
Direct Labor can be used as the basis for 
distributing the Foundry Charge and Com- 
mercial Cost items, while the Tonnage 
Charge items are distributed on the basis of 
tonnage produced. This seems to be fair, as 
the department having the largest amount of 
Direct Labor and tonnage would have to 
stand the largest amount of these expenses 
apportionable to labor and tonnage, which 
could not be charged direct. 



Kepresentative distribution of Costs 
Foundry Charge. 

Direct to departments — 

Power Plant, Shipping, Kigging, Taxes and In- 
surance. 



COSTS IN" VARIOUS CLASSES OF FOUNDRIES 353 

Part direct to departments and the balance to "gen- 
eral"— 

Cleaning Labor, Chipping, Shop Supervision and 
Clerical, Foundry, General and Cleaning Eoom 
Supplies. 
General — 

Maintenance of Buildings, Plant Equipment, 
Power and Transmission Machinery and Cast 
Equipment; Stable, Pattern Shop, Machine 
Shop, Carpenter Shop, Blacksmith Shop, Pat- 
tern Storage and Depreciation. 

Tonnage Charge. 

Direct to departments — 

Eeplace Labor, Night Gang, Foundry Supplies, 

Core Eoom Supplies on the basis of the Core 

Labor in each department, and Maintenance of 

Patterns. 

Part direct to departments, balance to "general" — 

Maintenance of Flasks. 
"General — 

Cupola Labor, Handling Materials, Yard Labor, 
Cupola Supplies, Power Plant, Analysis Expense. 

Commercial Cost. 

All of the Administrative to "general." 
All of the Selling direct to the departments where 
possible and the balance to "general." 

The following rules can be used for dis- 
tributing to the departments the Foundry 
Charge, Tonnage Charge, and the Commer- 
cial Cost items in the "general" section: 



354 maximum production" 

Eules for Departmental Distribution 
1. — For Foundry Charge and Commercial Cost — 
A — Direct Labor in the Machine Department. 
B— " " " " Bench Department. 

C— " " " " Floor Department. 

D— Total Direct Labor (A + B + C). 
ABC 

— — — = Departmental rates in per cent. 
D D D 

Distribute to each department, using the rates as- 
certained, the proper proportion of the Foundry 
Charge and Commercial Cost, treating each ex- 
pense element separately. 
2. — For Tonnage Charge— 

E — Tonnage in Machine Department. 

F— " " Bench Department. 

G— " " Floor Department. 

H— Total tonnage produced (E + F 4- G). 

E F G 

— = Departmental rates in per cent. 

H H H 

Distribute to each department, using the. rates 
ascertained, the proper proportion of the Ton- 
nage Charge, treating each expense element sepa- 
rately. 
3. — For each department, add the amounts charged 
direct and distributed, according to the follow- 
ing classes — Direct Material, Direct Labor, 
Foundry Charge, Tonnage Charge and Commer- 
cial Cost. 

We are now in possession of three sets of 
figures covering the three departments, and 
to get at the detailed costs of the product of 
each of them, use the rules 11-19 inclusive, by 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 355 

simply adding the words "for each, depart- 
ment' ' as, for example: (Bule 11) — "Se- 
lect from the list previously shown — cases a-j 
— the division desired, for each department, ' ' 
and after the rates per 1,000 pounds have 
been ascertained for each classification of 
the production in each of the three depart- 
ments, the foundryman will be in possession 
of what he wants to know regarding his costs 
to produce,. 

Each foundryman must determine for him- 
self, from his conditions, whether he wants 
to treat his foundry as a single department 
or to divide it into several. If the principal 
requirement is almost absolute accuracy, 
regardless of the detail necessary, and the 
proposition is a large one, then there is no 
question but that the accounting should con- 
sider the foundry as made up of several de- 
partments. If, however, the foundry execu- 
tive does not want to go into the detail that 
is necessary to departmentalize his foundry, 
and if costs are wanted that are fair and 
within reason, the foundryman can then con- 
sider his foundry as one department with a 
classified output, which will give the results 
he wants at a minimum expenditure. 

While not within the province of this dis- 



356 MAXIMUM PRODUCTION 

cussion to lay down hard and fast rules as to 
specific treatment, the following is offered 
for foundries considered as a single depart- 
ment, as a means of covering the ordinary 
conditions that are met with in the three 
classes of foundries previously mentioned : 

1. — Foundries under Class 1, classify production ac- 
cording to Case g (customers' work) with pro- 
vision to treat certain work according to Case / 
(individual castings). 

2. — Foundries under Class 2, classify according to 
Case d (use). 

3. — Foundries under Class 3, classify production as 
shown at 1. — for jobbing work, and at 2. — for 
work for consumption by the business of 
which the foundry is a part. 

Through the methods above suggested, we 
get at the end of a period, for Class 1 foun- 
dries, the cost of production by customers, 
which cost is offset by the price at which 
the work is sold to the trade, the difference 
establishing the desirability of the work in 
question as well as the places where atten- 
tion must be concentrated ; and as provision 
can easily be made for ascertaining the cost 
of certain castings for certain customers, the 
foundryman has in his possession, through 
the classification suggested, the information 
necessary to improve where necessary, the 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 357 

conditions determining how he shall improve. 
We also get at the end of a period, for Class 
B foundries, the cost of the castings for the 
machine or boiler shop, according to the 
use, which cost is offset by the price allowed 
the foundry and charged to the departments 
using the castings. 

Few appreciate the fact that consumption 
of castings should be at rates which recog- 
nize the difference in the cost to produce 
them, so that it seems important that our 
costing take this difference into considera- 
tion. A clothier, because he purchases 100 
suits at $15 each, 100 suits at $20, 100 suits 
at $25, and 100 suits at $30, will not sell them 
at $27 each simply because $27 means the 
average cost of $22.50 plus 20 per cent profit. 
Assuming, however, that he did this, on his 
$15 suits he would make $1,200 ; on the $20 
suits he would make $700 ; on the $25 suits he 
would make $200, while on the $30 suits he 
would lose $300, and as a result he would 
have $1,800 profit in all. The chances are 
that he would have a hard time disposing of 
$15 and $20 suits at $27; while because of 
the quality, his customers would jump at the 
chance of buying $25 and $30 suits at $27. 
At any rate, on his two most expensive lines 



358 MAXIMUM PRODUCTION" 

he would make $200 and lose $300, and he 
would perhaps have to trust to good fortune 
and " sales" to dispose of the others; so 
that by the time he had sold them all, he 
would very likely find that he was a long 
way from making his 20 per cent. Instead 
of this, our clothier would take each cost 
and add his profit, and if a man wanted a 
cheap suit, he would pay a price that would 
net a profit of 20 per cent, which would also 
be the case should a man want a more ex- 
pensive garment, and when the suits were 
all disposed of, the clothier would find that 
he had made a profit of $1,800 on his invest- 
ment. 

This illustration applies to machinery 
manufacturers making their own castings. 
An average cost, because of the word "aver- 
age, ' ' means that some cost more and others 
less, . and there seems to be no consistent 
reason why the difference should not be ob- 
served. Assume that in a machine shop two 
lines are being manufactured — one a steam 
engine of simple construction, and the other 
a gas engine of intricate and complicated 
design ; it will be found that the castings for 
the first line will cost considerably less than 
the castings for the gas engines. If the 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 359 

steam-engine eastings cost $2.25 per 100 
pounds and the gas-engine castings $2.75, 
why use an average of $2.50 for all? A dif- 
ference of $5.00 per ton either way is some- 
thing to think about when the total weight 
of the castings in the engines is taken into 
consideration, for on the steam-engine cast- 
ings it would mean a reduced cost of the 
finished engine, which would result either in 
a greater profit, if the regular price is ob- 
tainable, or the same profit on a larger num- 
ber of sales, due to a decreased price; and 
while the cost of the finished gas engines 
would be greater, necessitating a higher 
price, it is reasonable to ask the consumer 
to pay the most for that which cost the most 
to produce, especially when it is a compli- 
cated proposition of superior design and 
workmanship, enabling the manufacturer to 
talk quality. 

I wish to emphasize, at this point, the im- 
portance of treating all foundries as jobbing 
foundries. If a machine shop is purchasing 
its castings from an outside foundry for 
$2.70 per 100 pounds, this figure is naturally 
used by the machine shop in figuring the cost 
of the cast iron in the machine. Should a 
foundry be built and operated, the person 



360 MAXIMUM PRODUCTION 

who is placed in charge of the foundry may, 
through efficient management, turn out a 
production costing $2.45 per 100 pounds. 
These same castings, purchased outside, cost 
$2.70; therefore the castings that are made 
are worth this same amount to the company, 
the foundry being entitled to a credit of $0.25 
per 100 pounds as the difference between 
what these castings are worth and what they 
actually cost to make. Suppose, for instance, 
a certain machine selling for $2,000 contains 
20,000 pounds of cast iron, which at $2.70 
per 100 pounds would mean $540 as the cost 
of this material. Would it be good business, 
if the machine had a ready sale, to reduce 
the price by $50 simply because the castings 
are being made for $5.00 a ton less? Or 
would it be better to treat this saving as a 
profit — which, in reality it is — and as such 
having nothing whatever to do with the mat- 
ter of price? The latter method seems the 
most logical, and if any cut in price is neces- 
sary it should be at the expense of the de- 
partment getting the credit for the sale. 

In estimating, market conditions largely 
prevail; and there seems to be no good 
reason why a price of $2.45 should be used 
instead of $2.70, if this latter quotation is 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 361 

near the market figure. A sales manager 
recently stated that whenever he bid on a job 
which contained considerable cast iron, he 
was generally able to get the work — in fact 
the orders seemed to fall into his lap. This 
led him to investigate, and he found that his 
competitors were using a greater rate for 
cast iron than he was. Looking still further, 
he learned that he was using the actual foun- 
dry cost figures — which was not a complete 
cost by any means — instead of the rate that 
he would have been forced to use had his 
company been purchasing the castings, with 
the result that he had, unknowingly, been 
" doing' ' his company out of profits which 
would have been made had the rate been 
higher. At any rate, the cost figures were 
increased without any apparent reduction in 
sales. 

On the other hand, suppose on account of 
a low tonnage or other reasons the castings 
should cost $2.90 instead of $2.70. Would it 
do to charge the machine shop with castings 
at $2.90 — an increase in the cost of $4.00 per 
ton — or make the foundry stand this loss, by 
charging the machine shop with castings at 
$2.70, in this way costing up the work at a 
price for which the castings could be pur- 



362 MAXIMUM PRODUCTION 

chased outside? It would certainly not do 
to take the $2.90 price into consideration for 
estimating purposes, because of the fact that 
the competition might be using a price 
around the $2.70 mark — the difference 
amounting to quite a little on an order of 
any size. At any rate there is no getting 
away from the fact that a loss has been made, 
for if castings which cost $2.90 to make can 
be purchased for $2.70 — and only good ones 
at that — then $4.00 per ton is being thrown 
away; and as the machine shop is in no way 
to blame for this loss, we should make the 
department producing these castings stand 
whatever the loss might amount to. If the 
foundry is to take care of its own losses, then 
the foundry is entitled to any profits it might 
make. 

The foundry should therefore be consid- 
ered as a producing department, in the same 
sense that the machine shop is a producing 
department, instead of treating it as an ad- 
junct of the machine shop. It should be car- 
ried as a separate department through the 
general books of the company, in this way 
placing the foundry squarely on its own feet 
— side by side with the machine shop, a posi- 
tion it is most certainly entitled to — besides 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 363 

furnishing the proper incentive to each and 
every man, from the foundry superintendent 
down to the apprentices, for the reason that 
they feel that if all do their share in making 
a success they can participate in that suc- 
cess through increases in pay. In addition, 
such a procedure gives to the management a 
means for determining the efficiency of its 
foundry department, as well as deciding 
them as to whether it would be policy to 
close their foundry and purchase their cast- 
ings elsewhere. It also places the foundry 
on about the same basis as outside foundries, 
which not only tends to make estimation 
more uniform, but competition more intelli- 
gent. 

To carry the foundry properly through 
the books of a manufacturing company, I 
would suggest that two accounts be opened 
as General Ledger accounts — Foundry 
Manufacturing Account, and Foundry In- 
come Account, and as a large number of con- 
cerns are beginning to treat all materials as 
" stores' ' until used, the plan should be to 
sell monthly to " stores,' ' as "castings," the 
total output of the foundry at a price that 
will correspond as closely as possible with 
the price that would have to be paid for pur- 



364 MAXIMUM PRODUCTION 

chased castings. To illustrate: assume that 
the foundry produced 300 tons in a month at 
a cost of $48.00 per ton, or $14,400, the divi- 
sions being — materials, $6,000; labor, $3,900, 
and expenses, $4,500 — the price allowed the 
foundry being $2.65 per 100 pounds, or 
$53.00 per ton. Our Journal entries would 
read:* 

Charges. Credits. 

(1) Foundry Mfg. Acct.300 tons produced@$48.00 ton. .$14,400 

Stores Acct $6,000 

Labor Acct 3,900 

Burden 4,500 

(2) Stores 300 tons purchased@$53.00 ton. . .15,900 

(3) Foundry Mfg. Acct . . 300 tons sold to Stores 15,900 

(4) Foundry Mfg. Acct . . Profit, month's production 1,500 

(5) Foundry Income Acct — Monthly profit 300 tons 1,500 

Ledger Accounts. 

Stores. 
(2) 300 tons castings pur- 
chased from fdry. @ 
$53.00 per ton $15,900 

Foundry Mfg. Acct. 

(1) 300 tons produced @ (3) 300 tons sold to stores, 

$48.00 per ton $14,400 $53.00 per ton $15,900 

(4) Monthly profit 1,500 

$15,900 

$15,900 
Foundry Income Acct. 

(5) Monthly profit 300 tons, $1,500 

Eefore concluding, it might be well to state 
that in determining the cost of production in 
foundries in Class 2 and 3, consideration 
should be given to the fact that there are no 
selling expenses to be added to the produc- 

* Figures show Journal entries and corresponding 
postings. 



COSTS IN VARIOUS CLASSES OF FOUNDRIES 365 

tion made for use for the business of which 
the foundry is a part, because of the fact that 
this expense is necessary in marketing the 
finished product of the machine or boiler 
shop, for which reason it would be a charge 
against the production of these departments 
and not against that of the foundry— the 
business really buying, as before stated, the 
entire monthly production of the foundry, 
this transaction being one in effect only, in- 
volving the expenditure of no money what- 
ever as a selling expense. Defective castings 
returned from the machine or boiler shop 
because of defective workmanship in the 
foundry— the only selling expense element 
the specialty foundry has to deal with— 
would be treated as "foundry errors" and 
included in the Foundry Charge section, at 
the price less scrap value. Foundries in 
these same classes, in the absence of an or- 
ganization of their own, should be made to 
stand a portion of the general administrative 
expenditure— a combination of judgment and 
an analysis of the items making up this ele- 
ment, to determine the proper proportion to 
charge to the Foundry Department. 



THE END. 



THE TWELVE PRINCIPLES OF 
EFFICIENCY 

By Harrington Emerson 

HARRINGTON EMERSON'S earlier book ("Effi- 
ciency as a Basis for Operation and Wages"), 
while thoroughly practical, is essentially the 
statement of a philosophy — a new view of the total in- 
dustrial problem and the relations and proportions of 
the factors that enter into it. 

This later volume, stronger even than the former, and 
more specific in statement, is a reduction of the doctrine 
of efficiency to practice. Emerson discovers twelve prin- 
ciples by which efficiency is determined. Five of these 
concern the relations between men — between employer 
and employee; seven of them concern industrial meth- 
ods, or institutions and systems established in the works. 
These twelve principles are so definite, so constant, so 
true, that they may be used as gauges. Any industry, 
any establishment, any operation, may be tested by 
these twelve principles, and its inefficiency located and 
measured by the amount of its failure to conform to 
one or more of them. 

CONTENTS BY CHAPTERS 
I. The Organization Which Makes Efficiency Pos- 
sible. 
II. How Efficiency Organization Differs from the Old 

Type. 
III. First Principle: Clearly Defined Ideals. 
IV. Second Principle: Common-Sense. 
V. Third Principle: Competent Counsel. 
VI. Fourth Principle: Discipline. 
VII. Fifth Principle: The Fair Deal. 
VIII. Sixth Principle: Reliable, Immediate and Ade- 
quate Records. 
IX. Seventh Principle: Despatching. 
X. Eighth Principle: Standards and Schedules. 
XI. Ninth Principle: Standardized Conditions. 
XII. Tenth Principle: Standardized Operations. 
XIII. Eleventh Principle: Written Standard-Practice 

Instructions. 
XIV. Twelfth Principle: Efficiency Reward. 
XV. The Measurement and Cure of Wastes. 
XVI. The Executive of an Efficient Organization. 

12mo, 244 pages, Cloth Binding, $2.00 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



PRODUCTION FACTORS 

IN COST-ACCOUNTING AND WORKS 
MANAGEMENT 

By A. Hamilton Church 



IN this book the author extends, in a remarkable and 
most interesting way, the study of "The Proper Dis- 
tribution of Expense Burden." He follows the clear 
and instructive manner which appealed to accountants 
in his former and now well-known work, but he extends 
the principles to new grounds and larger possibilities. 
He proposes, indeed, not a new way of accounting, but 
a new way of looking at the whole problem of manu- 
facturing. He purposes to avoid the present methods of 
averaging and distributing expense by a percentage, and 
instead of this to separate from the outset all the im- 
portant factors of production (as, for example, buildings, 
power, stores and transport, etc.), and reduce them to 
unit charges. 

The demonstration is concrete enough to enable the 
cost accountant to apply it to his own case, and yet not 
lacking in the broad statement of principle that adapts 
it to all cases. The scope of the argument is outlined by 
the chapter titles which follow. 



CONTENTS BY CHAPTERS 

I. The Definition of Factors Other Than Labor. 
II. Production Factors as Related to Cost Accounts 
and Staff. 

III. Elements of the Land Factor. 

IV. Buildings, Lighting, Heating and Ventilation, 

Stores and Transport, and Organization. 
V. Apportioning Indirect Expense by Production 

Factors. 
VI. Control Accounts. 
VII. Costs in Relation to the Financial Books. 



12mo, Cloth Binding, 200 pages, $2.00 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



EFFICIENCY AS A BASIS FOR OPERA- 
TION AND WAGES 

By Harrington Emerson 

MR. EMERSON'S book is not merely the develop- 
ment of a theory of works management. It 
is the statement of principles applied and re- 
sults secured in practice. The methods advocated are 
being used in some of the largest manufacturing and 
operating institutions in the United States. They have 
proved their worth and practicality by resultant sav- 
ings amounting in the aggregate to millions of dollars 
annually, as proved by the balance sheets of corpora- 
tions making official report of their earnings and ex- 
penses. This volume contains the fullest, and indeed 
the first complete, statement made of the elements of 
organization, management, and operation under the Effi- 
ciency or Individual-Effort system. 

The author has achieved national distinction by his 
widely-noticed work in reorganizing the Santa Fe shops 
and his connection in a similar capacity with the Amer- 
ican Locomotive Co. His methods for increasing in- 
dustrial efficiency have been attentively examined by in- 
terested managers and specialists East and West. 

CONTENTS BY CHAPTERS 
I. Typical Inefficiencies and Their Significance. 
II. National Efficiencies: Their Tendencies and In- 
fluence. 

III. The Strength and Weakness of Existing Sys- 

tems of Organization. 

IV. Line and Staff Organization in Industrial Con- 

cerns. 
V. Standards: Their Relations to Organization and 
to Results. 
VI. The Realization of Standards in Practice. 
VII. The Modern Theory of Cost Accounting. 
VIII. The Location and Elimination of Wastes. 
IX. The Efficiency System in Operation. 
X. Standard Times and Bonus. 
XL What the Efficiency System may Accomplish. 
XII. The Gospel of Efficiency. 
172 pages, i2mo, Cloth Binding. $2.00 Prepaid 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



WORK, WAGES, AND PROFITS 

By H. L. Gantt 

THIS book is a complete explanation of Mr. Gantf s 
practice in reducing production costs. He shows 
the reasons on which his system is based, de- 
tails the methods he uses, and exhibits the results ob- 
tained in a large number of cases. In this last connec- 
tion many colored charts are presented, showing graph- 
ically the working of the bonus system in various fac- 
tories. These alone would make the book invaluable 
for study and reference. 

Mr. Gantt takes up the ordinary wage, systems, show- 
ing logically and clearly why day-work and piece-work 
fail to promote efficiency. Then he proceeds to discuss 
"Task- Work with a Bonus," and defines clearly the four 
elements involved in it — Expert Investigation, Stand- 
ard Methods, Proper Instructions, Sufficient Compensa- 
tion. He describes each step necessary in introducing 
the plan, and everything essential to success in its intro- 
duction. 

Mr. Gantt himself is too well known to need intro- 
duction to any industrial audience. He has been active 
for twenty years in advanced work in labor manage- 
ment. For ten years the "Gantt bonus system" has 
been one of the very few notably successful wage meth- 
ods in extended use. 

CONTENTS BY CHAPTERS 

I. The Application of the Scientific Method to the 

Labor Problem. 
II. The Utilization of Labor. 

III. The Compensation of Workmen. 

IV. Day Work. 
V. Piece Work. 

VI. Task Work with Bonus. 
VII. Training Workmen in Habits of Industry and 

Co-operation. 
VIII. Fixing Habits of Industry. 
IX. Profits, and Their Influence on the Cost of Liv- 
ing. 

i2mo, 200 pages, Colored Charts, 3 Folding Plates, 
Cloth Binding, $2.00 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



PROFIT - MAKING MANAGEMENT IN 
SHOP AND FACTORY 

By Charles U. Carpenter 

PROFIT-MAKING MANAGEMENT Is a concise ex- 
pression of the methods whch Mr. Carpenter has 
developed and which he constantly uses in his own 
practice. They have been tried and perfected under the 
stress of daily operation in the course of his experience 
as supervisor, manager, head of the labor department, 
and president of various large manufacturing plants, 
notably the National Cash Register Company and the 
Herring-Hall-Marvin Safe Company, of which latter con- 
cern he is now chief executive. 

The study of works-management methods will be found 
to be marked throughout by the clear sight, the fair 
mind, the direct dealing, and the strong vitality of the 
author. The whole treatment is vibrant with life, the 
work indeed having been produced amid the incessant 
and insistent claims of active work in the management 
of the great manufacturing company of which he is 
president and manager. 

CONTENTS BY CHAPTERS 
I. Reorganization of a Run-Down Concern. 
II. Practical Working of the Committee System. 
III. Reports ; Their Necessity and Their Uses. 
IV. Designing and Drafting Department. 
V. The Tool Room; the Heart of the Shop. 
VI. Minimizing the Time of Machine-Tool Opera- 
tions. 
VII. Possibilities Attending the Use of High-Speed 

Steel 
VIII. Determination of Standard Time for Machining 
Operation. 
IX. Standard Times for Handling the Work. 
X. Standard Times for Assembling. 
XI. Stimulating Production by the Wage System. 
XII. Stock and Cost Systems as a Factor in Profit 
Making. 
XIII. Upbuilding of a Selling Organization. 
XIV. Effective Organization in the Executive Depart- 
ment. 
Octavo, Cloth Binding. $2.00 Prepaid 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



THE PLANNING AND BUILDING OF 
INDUSTEIAL PLANTS 

By Charles Day 

A SYNOPSIS of the whole problem and the practical 
methods of solving it, by one of the greatest 
American specialists in the design, layout, and 
erection of efficient manufacturing plants. 

Mr. Day has been engaged as consulting engineer and 
adviser in the construction of some of the most success- 
ful shops and factories in the United States. His book 
is a formulation of the exact processes he follows in 
the office and field work connected with such an under- 
taking. 

The work is laid out by a logical scheme in which 
every step is in its proper place and proportion. The 
successive steps are then discussed in detail. Novel and 
most interesting diagrams are employed to illustrate 
the methods, and many recently built plants are shown 
in plan and elevation. 

The scope of the book is suggested by the chapter 
headings below. 

CONTENTS BY CHAPTERS 
I. General Classification of the Work 
II. Determining Specific Requirements of a Plant. 

III, Selecting the Site and Defining the Buildings and 

Equipment. 

IV. Detail Plans and Specifications. 

V. Construction Work and Installation of Equip- 
ment. 
VI. Occupation and Commencement of Operation. 
VII. Routing; A Prime Factor in Plant Layout. 
VIII. Metal-Working Plants and Their Machine-Tool 
Equipment. 
IX. An Analytical Comparison of Various Actual 

Plants. 
X. Power Generation and Utilization. 
XI. Functions of the Engineering Organization. 
XII. Financing and Compensation. 

i2mo, Cloth Binding. Illustrated. $2.00 Prepaid 

THE ENGINEEBING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



PROPER DISTRIBUTION OF EXPENSE 
BURDEN 

By A. Hamilton Church 

THIS book at once took rank as a standard refer- 
ence work on one of the most difficult questions 
of cost-finding. 

The accurate distribution of general expense is ad- 
mittedly one of the most perplexing, but yet one of the 
most important, problems with which the manufacturer 
must deal. The simple but thorough analysis conducted 
in this volume, and the clear, common-sense demonstra- 
tion presented, will furnish a reliable guide to the solu- 
tion of highly complex conditions in factory accounting. 

Much of the published literature in this field has been 
purely descriptive, and has gone little farther than to 
present specialized adaptations employed in certain in- 
dividual shops, and perhaps not well suited to any but 
the one establishment for which each was designed. Mr. 
Church's material is of far greater value. He is not 
concerned with the size, ruling, or printing of forms 
and cards — matters which should be designed by the 
accountant to fulfill his special purpose. He goes to 
the root ideas of cost-finding, and lays down broad prin- 
ciples by which safe and reliable figures may be obtained 
for machine, piece, and job costs. These principles will 
properly distribute all expenses of manufacture, mar- 
keting, and management, so that the truth may be known 
as to the profit or loss of any line of product, and 
changes in manufacturing cost from time to time may be 
instantly detected and the cause discovered. 

CONTENTS BY CHAPTERS 

I. Interlocking General Charges with Piece Costs. 
II. Distributing Expense to Individual Jobs. 

III. The Scientific Machine Rate and the Supplemen- 

tary Rate. 

IV. Classification and Dissection of Shop Charges. 
V. Mass Production and the New Machine Rate. 

VI. Apportionment of Office and Selling Expense. 

i2mo, Cloth Binding. $1.00 Prepaid 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street New York, U. S. A. 



THE COMPLETE COST-KEEPER 

SHOP COST-KEEPING. FACTORY ACCOUNTING 
By Horace L. Arnold 

THIS book is designed to give such an exhibition of 
widely-differing systems of cost-keeping now in 
satisfactory use as will afford any manager, al- 
though not himself an accountant, the knowledge need- 
ful to an intelligent comparison between his own meth- 
ods and cost-keeping methods in general. 

Every step in the use of the several systems is mi- 
nutely detailed, and when the factory production is 
separated from the purely commercial operation of dis- 
posing of the factory product, the commercial books 
are also described, and in all cases the number of men 
at work, and the number and class of bookkeepers, 
clerks, messengers, time-takers, and so on, employed in 
cost accounting is given, so that any manager can tell 
about what he may expect the use of a similar system 
to cost in his own establishment. 

CONTENTS BY CHAPTERS 

I. The Necessity for the Factory. 

II. Manufacturers and Commerce. 

III. A Collective Production Order System. 

IV. A Simple System for Duplicate Work. 

V. A General System for Medium-Sized Works. 

VI. A Complete System for a General Iron Works. 

VII. An Elaborate System for a Highly Organized 

Establishment. 

VIII. A Special Card System for an Electrical Works. 

IX. The Card System of Accounting. 

X. General Expense Accounts. 

XI. Mechanical Aids to Accounting. 

450 Pages, Octavo, Cloth Binding. $5.00 Prepaid. 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York. 



THE FACTORY MANAGER 

THE LATEST AMERICAN FACTORY PRACTICE 
By Horace L. Arnold 

THE one aim of "The Factory Manager" is to ex- 
plain the methods of highly successful factory 
and shop managers. It tells how they eliminate 
dead expense ; unnecessary fixed charges ; friction and 
delays in handling work ; useless help, methods and rec- 
ords ; unnecessary time and material ; interruptions, 
"waits" and guesswork ; too many handlings of work, 
etc., and how they arrive at the exact cost of all work 
done. 

There is not a theory in the whole book. Every chap- 
ter is a working plan available for immediate ur>e. 
Every method, every card, every blank form and rec- 
ord book, is in successful use ; every one is the result 
of years of testing, revision and improvement. All 
cards, tickets, order-blanks, page or sheet headings, etc., 
have the size marked, together with the color and kind 
of paper on which they are printed. Anyone can, there- 
fore, reproduce any form shown and readily apply it 
to his own business. 

The purpose and exact manner of using every 
method and form are plainly and completely explained, 
so that everyone can easily understand its purpose and 
determine its value if applied in his own shop. 

CONTENTS BY CHAPTERS 
I. Factory Routine, Organization and Cost 

Finding. 
II. Advances in Factory Accounting. 

III. Cost Finding System of the Link-Belt En- 

gineering Co. 

IV. The Forms of the Link-Belt Engineering Co. 
V. Cost Finding System of the Bigelow Co. 

VI. The C. B. Cottrell & Sons Co. 

VII. The Potter & Johnston Machine Co. 

VIII. The Wells Brothers Co. 

IX. The C. W. Hunt Co. 

432 pages, Octavo, Illustrated, Cloth Binding. $5.00 

Prepaid 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



PATENTS AS A FACTOE IN MANU- 
FACTURING 

By Edwin J. Prindle 



THE purpose of this volume is not in any sense 
to make the inventor or the manufacturer his 
own patent lawyer. It is rather to convey an 
idea of the nature of a patent, the protection it may 
afford, the advantages it may possess for meeting cer- 
tain comro ercial conditions, the safety which may be 
secured in relations between employers and employees, 
and the general rules by which the courts will pro- 
ceed in upholding the patent and in thwarting attempt- 
ed infringements — to show the manufacturer, in a gen- 
eral way, what may be accomplished by patents, but 
not to lead him to attempt such accomplishment with- 
out legal advice. 

CONTENTS BY CHAPTERS 

I. Influence of Patents in Controlling a Market. 

II. Subject, Nature, and Claim of a Patent. 

III. What Protection a Patent Affords. 

IV. Of Infringements. 

V. Patenting a New Product. 

VI. Patent Relations of Employer and Employee. 

VII. Contests Between Rival Claimants to an Inven- 
tion. 

i2mo, Cloth. $2.00 Prepaid 



THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



THE ENGINEERING INDEX 

1884-1909 



AVERY important improvement, every new inven- 
tion, novel process and industrial development 
may be traced by The Engineering Index. Pa- 
pers on tens of thousands of subjects, both of theory 
and practice, are recorded in it. Each index note is de- 
scriptive in the literal sense of that term. Thus, in ad- 
dition to the full title of the article, the name of the 
author, the title and address of the journal and the ex- 
act date of publication, there is given in each case an 
expert resume of the ground covered by the article or 
paper described. 

The Engineering Index is, therefore, both an Index 
and a Digest of engineering literature and development 
in all parts of the world for the past year. And this 
record of current practice in engineering is exactly the 
information you most often need — and which is the most 
difficult to obtain, because it has not reached the stage 
of insertion in technical books. 

The time-saving utility of this Index consists in the 
fact that it points directly to each and every original 
publication that the searcher may desire to consult. 

Volume I., 1884 to 1891 inclusive, 475 pages. 

Out of Print. 
Volume II., 1892 to 1895 inclusive, 474 pages. 

Out of Print. 

Volume III., 1896 to 1900 inclusive, 1,030 pages $7.50 

Volume IV., 1901 to 1905 inclusive, 1,234 pages $7.50 

The Engineering Index for 1906, 412 pages $2.00 

The Engineering Index for 1907, 452 pages $2.00 

The Engineering Index for 1908, 454 pages $2.00 

The Engineering Index for 1909, 488 pages $2.00 

THE ENGINEERING MAGAZINE 

140-142 Nassau Street, New York, U. S. A. 



r 30 1915 



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